Alternative Investments

Natural Resources practice questions

Natural Resources is part of CFA Level I Alternative Investments. Alternative Investments questions emphasize private capital, real estate, infrastructure, natural resources, hedge funds, digital assets, and performance measurement. Use this page to review the controlling ideas, then work through 4 questions with answer explanations and common traps.

Review the worked explanations before moving into adaptive practice. The app version can mix this topic with due reviews and weak related concepts.

Practice this topic

What to know

Identify the rule, formula, or decision criterion before reading the answer choices. CFA Level I distractors often use the right vocabulary with the wrong condition.

How to practice

Work each item under time pressure, then compare your reasoning with the step-by-step explanation and key takeaway.

Review signal

Missed questions should become scheduled reviews when the error comes from a concept gap, formula setup, or answer-choice trap.

Easy

Alternative Investments

Natural Resources

A commodity futures market is in backwardation. For an investor who maintains a long position by repeatedly rolling expiring contracts into later-dated contracts, this condition most likely:

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Moderate

Alternative Investments

Natural Resources

A fully collateralized long commodity futures strategy earns a total return of 5.2% for the year. Over the same period, the spot price return of the underlying commodity is 4.0% and the collateral return is 3.1%. The roll return is closest to:

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Very Difficult

Alternative Investments

Natural Resources

Inventories of a storable industrial metal fall to unusually low levels, and manufacturers place a high premium on holding immediate physical supply to avoid production stoppages. The most likely effect on the metal's futures curve is that it:

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Moderate

Alternative Investments

Natural Resources

Timberland returns are often described as having a biological growth component. The most accurate implication is that timberland:

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