Why might the price movement of a commodity-producing firm's stock differ from the commodity's price movement?
Explanation
Corporate risks, hedging, and operational issues affect the stock independently of the commodity price.
Other questions
Which of the following best describes the primary source of returns for timberland investments?
In addition to land price changes and agricultural product sales, what other factor specifically influences returns on farmland?
Which investment vehicle is most suitable for investors who are restricted to buying equity shares but want commodity exposure?
What is a primary drawback of investing in equities directly linked to a commodity?
How are Managed Futures Funds typically managed?
Which structure for commodity investing is specifically noted as an alternative to pooled funds for High Net Worth Individuals (HNIs)?
Historically, how do returns on commodities compare to returns on stocks and bonds?
Why is the Sharpe ratio for commodities typically low?
Which economic factor do commodity prices tend to move with, allowing them to act as a hedge?
What primarily determines the spot prices for commodities?
When Long Hedgers dominate the market, the market is said to be in which condition?
If the futures price is less than the spot price, the market is in:
Which component of return is defined as the yield due to a difference between the spot price and futures price?
What is the sign of the roll yield when the market is in Backwardation?
What constitutes the 'Collateral yield' in a commodity investment?
A market where the futures price is greater than the spot price is known as:
Who is said to dominate the market when it is in Backwardation?
What three components combine to form the total price return of a commodity investment?
If a commodity market is in Contango, what is the sign of the roll yield?
Which factor is NOT listed as a direct return driver for farmland in the text?
Commodity ETFs are best described as investing in:
If the Spot Price is 100 USD and the Futures Price is 110 USD, the market is in:
If the Spot Price is 100 USD and the Futures Price is 90 USD, the market is in:
An investor earns a Collateral Yield of 5 percent and a Spot Price return of 10 percent. If the market is in Contango resulting in a Roll Yield of -3 percent, what is the Total Return?
An investor earns a Collateral Yield of 4 percent and a Spot Price return of -2 percent. If the market is in Backwardation with a Roll Yield of 5 percent, what is the Total Return?
Which of the following is considered a 'specialized fund' in the context of commodities?
Which factor is cited as factoring into commodity prices along with supply and demand?
What is the primary benefit of the low correlation between commodities and traditional investments?
In the context of 'Natural Resources Investment Features', which asset class returns include 'quality and quantity of the crops produced'?
Managed futures funds can be structured as:
Which commodity investment method involves 'Buying shares of commodity producing firm'?
Which investment form allows accounts to be 'tailored to the needs of investors'?
The convergence of futures prices to spot prices over the term of the contract generates which yield?
Global economics and value to the user are factors specifically mentioned to influence:
Commodity prices tend to act as a hedge against inflation because:
What is the relationship between production costs and commodity prices?
A negative roll yield is associated with which market condition?
If a commodity investment has a Collateral Yield of 3 percent, a Roll Yield of 2 percent, and the Spot Price remains unchanged (0 percent change), what is the investor's return?
Which type of investors are Individual Managed Accounts for commodities mainly designed for?
Which of the following is NOT a component of 'Total price return' for commodities?
Regarding timberland, returns also include:
Which investment vehicle allows for 'Active management' where managers can concentrate on specific sectors?
If long hedgers dominate, causing the futures price to exceed the spot price, what is the term for this market structure?
Which of the following describes 'Specialized funds'?
The return from collateral yield is primarily derived from:
If a market is in Backwardation, which inequality holds true?
Total return is 10 percent. Collateral yield is 2 percent. Roll yield is 3 percent. What was the change in spot prices?
Which entities taking active roles in determining the direction of the company are NOT typically associated with Commodity ETFs?
What is the implied relationship between Short Hedgers and Roll Yield according to the text?