I just did a Schweser Mock (Practice Exam Volume 1 2016, p.110) and came across the following question:
Over time, compared to traditional stock and bond investments, the commodities asset class has exhibited:
A - lower returns and lower price volatility
B - lower returns and higher price volatility
C - higher returns and lower price volatility
The correct answer is B: Returns on commodities over time have been lower than returns on global stock and bonds, and price volatility has been higher.
If this would be true, nobody would put commodities into their portfolio (more risk+less return). I think the correct answer should be “higher returns and higher price volatility”. Am I right on this one?
Thank you in advance, RWWD