Which of the following statements about investing in commodities is FALSE?

Study for the Variable Universal Life/Universal Life Plan (VUL/ULP) Exam. Prepare with flashcards and multiple choice questions, each question is accompanied by helpful hints and explanations. Ace your exam!

The statement that investing in fixed deposits gives high guaranteed returns is indeed false when discussing the context of commodities. While fixed deposits can provide guaranteed returns, those returns are typically lower compared to other investment avenues, particularly during times of economic inflation or when market interest rates rise. In contrast, commodities are usually more volatile and do not offer regular income since they are subject to market fluctuations and do not generate dividends or interest.

The other options highlight various motivations for investment and characteristics of other types of investments. Investing in commodities generally does not offer regular income, which aligns with option A. Additionally, options C and D address common reasons for investment: enhancing one's standard of living and funding education, which are significant motivations that apply to many investors. Therefore, option B stands out as false in this context, as it misrepresents the nature of fixed deposits compared to the investment returns typically associated with commodities.

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