0 of 15 questions completed
Questions:
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- 13
- 14
- 15
Information
TOTAL QUESTION: 15
TOTAL TIME= 10 MIN
You have already completed the Test before. Hence you can not start it again.
Test is loading...
You must sign in or sign up to start the Test.
You have to finish following quiz, to start this Test:
Your results are here!! for" Commodity Risk "
0 of 15 questions answered correctly
Your time:
Time has elapsed
Your Final Score is : 0
You have attempted : 0
Number of Correct Questions : 0 and scored 0
Number of Incorrect Questions : 0 and Negative marks 0
-
Not categorized
You have attempted: 0
Number of Correct Questions: 0 and scored 0
Number of Incorrect Questions: 0 and Negative marks 0
- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- 13
- 14
- 15
- Answered
- Review
-
Question 1 of 15
1. Question
What does commodity risk primarily refer to?
Correct
Commodity risk is the uncertainty caused by changes in future commodity prices that can affect revenue and profitability.
Incorrect
Commodity risk is the uncertainty caused by changes in future commodity prices that can affect revenue and profitability.
Unattempted
Commodity risk is the uncertainty caused by changes in future commodity prices that can affect revenue and profitability.
-
Question 2 of 15
2. Question
Which of the following is an example of an agricultural commodity?
Correct
Wheat, rice, corn, coffee, cotton, and sugar are examples of agricultural commodities.
Incorrect
Wheat, rice, corn, coffee, cotton, and sugar are examples of agricultural commodities.
Unattempted
Wheat, rice, corn, coffee, cotton, and sugar are examples of agricultural commodities.
-
Question 3 of 15
3. Question
Which of the following is classified as an energy commodity?
Correct
Crude oil, natural gas, and electricity are examples of energy commodities.
Incorrect
Crude oil, natural gas, and electricity are examples of energy commodities.
Unattempted
Crude oil, natural gas, and electricity are examples of energy commodities.
-
Question 4 of 15
4. Question
What is commodity price risk?
Correct
Price risk arises when unexpected changes in commodity market prices adversely affect a business.
Incorrect
Price risk arises when unexpected changes in commodity market prices adversely affect a business.
Unattempted
Price risk arises when unexpected changes in commodity market prices adversely affect a business.
-
Question 5 of 15
5. Question
What does basis risk in commodity markets refer to?
Correct
Basis risk arises from differences between the local commodity price and the relevant global or benchmark price.
Incorrect
Basis risk arises from differences between the local commodity price and the relevant global or benchmark price.
Unattempted
Basis risk arises from differences between the local commodity price and the relevant global or benchmark price.
-
Question 6 of 15
6. Question
What is quantity or volume risk?
Correct
Volume risk occurs when actual production or procurement is lower or different from the expected quantity.
Incorrect
Volume risk occurs when actual production or procurement is lower or different from the expected quantity.
Unattempted
Volume risk occurs when actual production or procurement is lower or different from the expected quantity.
-
Question 7 of 15
7. Question
A wheat farmer expects 1,000 tons of output but a drought reduces the harvest to 700 tons. What type of risk is this?
Correct
The reduction in expected production caused by drought is an example of quantity or volume risk.
Incorrect
The reduction in expected production caused by drought is an example of quantity or volume risk.
Unattempted
The reduction in expected production caused by drought is an example of quantity or volume risk.
-
Question 8 of 15
8. Question
What does cost risk or input price risk mean for a commodity producer?
Correct
Cost risk occurs when the prices of inputs such as raw materials, energy, fertilizer, or labor change and affect production costs.
Incorrect
Cost risk occurs when the prices of inputs such as raw materials, energy, fertilizer, or labor change and affect production costs.
Unattempted
Cost risk occurs when the prices of inputs such as raw materials, energy, fertilizer, or labor change and affect production costs.
-
Question 9 of 15
9. Question
Which of the following can create political risk in commodity markets?
Correct
Government export restrictions, tariffs, sanctions, taxes, and regulatory changes can affect commodity markets.
Incorrect
Government export restrictions, tariffs, sanctions, taxes, and regulatory changes can affect commodity markets.
Unattempted
Government export restrictions, tariffs, sanctions, taxes, and regulatory changes can affect commodity markets.
-
Question 10 of 15
10. Question
Which participant is most directly exposed to commodity production risks such as weather-related crop losses?
Correct
Farmers, plantation companies, and mining companies are producers and directly face production-related commodity risks.
Incorrect
Farmers, plantation companies, and mining companies are producers and directly face production-related commodity risks.
Unattempted
Farmers, plantation companies, and mining companies are producers and directly face production-related commodity risks.
-
Question 11 of 15
11. Question
Which risk can arise when a commodity buyer stores inventory for later sale?
Correct
Holding commodities exposes buyers to risks such as spoilage, theft, damage, and price changes while inventory is held.
Incorrect
Holding commodities exposes buyers to risks such as spoilage, theft, damage, and price changes while inventory is held.
Unattempted
Holding commodities exposes buyers to risks such as spoilage, theft, damage, and price changes while inventory is held.
-
Question 12 of 15
12. Question
Why can commodity exporters face foreign exchange risk?
Correct
Commodity exports are often priced in foreign currencies, so exchange-rate movements can change the local-currency value of export earnings and costs.
Incorrect
Commodity exports are often priced in foreign currencies, so exchange-rate movements can change the local-currency value of export earnings and costs.
Unattempted
Commodity exports are often priced in foreign currencies, so exchange-rate movements can change the local-currency value of export earnings and costs.
-
Question 13 of 15
13. Question
How can falling commodity prices affect a commodity-dependent government‘s revenue?
Correct
Lower commodity prices can reduce export-related tax revenue and weaken government finances.
Incorrect
Lower commodity prices can reduce export-related tax revenue and weaken government finances.
Unattempted
Lower commodity prices can reduce export-related tax revenue and weaken government finances.
-
Question 14 of 15
14. Question
Which financial instruments are commonly used to hedge commodity price risk?
Correct
Commodity futures and options can be used to reduce uncertainty from adverse price movements.
Incorrect
Commodity futures and options can be used to reduce uncertainty from adverse price movements.
Unattempted
Commodity futures and options can be used to reduce uncertainty from adverse price movements.
-
Question 15 of 15
15. Question
How can diversification help a business manage commodity risk?
Correct
Diversifying across commodities or asset classes can reduce dependence on the performance of a single commodity or market.
Incorrect
Diversifying across commodities or asset classes can reduce dependence on the performance of a single commodity or market.
Unattempted
Diversifying across commodities or asset classes can reduce dependence on the performance of a single commodity or market.