Which of the following statements are correct about investing in commodities.
Statement 1: Investing directly into commodities is challenging due to the daily price of the individual commodities.
Statement 2: Futures contracts are the easiest and cheapest way to invest in commodities. This involves engaging in a standardized contract with an agreement to buy or sell commodities in the future. The price of a futures contract is closely linked with the value of the underlying commodity and an investor who does not want physical delivery of the commodity can reverse out prior to maturity.
Statement 3: Inflation protected bonds are somewhat related to commodity prices due to the close relationship between commodity prices and inflation.
Statement 4: Investors can buy stocks of primary production companies, such as BHP.
a.
Statement 1
b.
Statement 1, 2 and 3
c.
Statement 2 and 4
d.
Statement 2, 3 and 4
e.
All of the above