This is the capstone — one graded run across the entire course. The questions roam over everything you have learned: how commodity futures standardize a barrel or a bushel and how delivery actually settles, how the cost of carry knits spot to forward, how roll yield and index construction make a fund diverge from spot, how seasonality and inelastic supply turn small shocks into big price swings, how gold and oil each march to their own driver, and how real assets defend purchasing power when inflation bites. There is no formula sheet and no second guess — read all four options before you commit, because each wrong one is a misconception that has burned a real trainee.
How this exam works
This is a graded exam. Questions arrive one at a time. Once you submit an answer it is final — there is no going back, no retries, and a wrong answer simply fails that question. Your score stays hidden until the very end, where you need 70% to pass. Slow down and read every option before you commit.
A wheat farmer expects to harvest 50,000 bushels in three months and worries the price will fall before then. To lock in today's price using CBOT corn-sized contracts of 5,000 bushels each, what should she do?
Select an answer to continue.
Course Recap
Whatever your score reads, the framework you just stress-tested — futures that standardize a barrel or bushel, the carry that links spot to forward, the roll and the index, the seasons and shocks, gold and oil each chasing their own driver, and real assets standing guard over purchasing power — is the working map of the whole asset class. Here is the entire course in one glance.
Big picture
Commodities & Real Assets, in one glance
- Commodities & Real Assets
- Commodity futures & delivery
- Standardized: quantity, grade, delivery point, month
- WTI = 1,000 bbl; corn = 5,000 bu; gold = 100 troy oz; notional = size × price
- Producers short-hedge; consumers/refiners long-hedge
- Delivery is real (WTI −37.63 dollars, Apr 2020); basis = cash − futures; basis risk remains
- Cost of carry
- F = S(1 + r + u − y); storage + financing → contango
- High convenience yield (tight inventory) → backwardation
- Gold ≈ pure financing carry; electricity non-storable breaks the formula
- Cash-and-carry caps a high forward; shorting physical is hard, so backwardation persists
- Roll yield & indices
- Contango → sell low, buy high → negative roll (drag)
- Backwardation → sell high, buy low → positive roll
- Index total return = spot + roll + collateral (T-bill); does NOT track spot
- GSCI production-weighted (energy-heavy); BCOM caps sectors
- Seasonality & supply shocks
- Gas peaks winter; gasoline summer; grains bottom at harvest
- Inelastic supply & demand: %ΔP ≈ %ΔQ ÷ elasticity
- Low days-of-supply → high convenience yield → backwardation
- Cobweb / hog cycle: high price → overproduction → glut → low price
- Gold & oil
- Gold: monetary, no yield, tracks inflation long-run; driver = real rate
- WTI (Cushing, landlocked) vs Brent (waterborne); spread = logistics
- OPEC+ swing producer, but fast shale supply limits control
- Crack spread = product − crude; 3-2-1 ≈ (2 gasoline + 1 distillate) − 3 crude
- Real assets & inflation
- 1 + real = (1 + nominal) ÷ (1 + inflation); ≈ nominal − inflation
- Inflation guts cash and nominal bonds
- Real assets defend: commodities, gold, real estate/REITs, infrastructure, TIPS (principal indexed)
- Commodities = highest inflation beta; size small (no yield, roll drag, high vol)
- Commodity futures & delivery
Key Takeaways
What you now own
You can read a forward curve and name what bends it: financing and storage lift it into contango, a tight-inventory convenience yield bends it into backwardation, and that shape decides whether a passive index earns or bleeds roll yield. You know a producer short-hedges and a consumer long-hedges, that delivery is real enough to send a price below zero, and that a commodity index tracks spot plus roll plus collateral — never spot alone. You can size an inflation shock from an inelastic elasticity, separate gold’s real-rate engine from oil’s logistics-and-shale story, and explain why a few percent of high-beta commodities defends purchasing power that fixed nominal bonds quietly surrender. That is the commodities-and-real-assets toolkit, end to end.