To answer this question, we need to understand the primary motivations for investment in commodities.
Option A) Positive correlation of commodities with unexpected inflation - This option is correct because commodities have a positive correlation with unexpected inflation. When inflation occurs unexpectedly, the prices of commodities tend to rise. Investors may invest in commodities to protect their purchasing power and hedge against inflation.
Option B) Positive correlation of commodities with stock and bond investments - This option is incorrect. While commodities may have some correlation with stock and bond investments, it is not their primary motivation for investment.
Option C) Positive volatility of commodities relative to stock and bond investments - This option is incorrect. While commodities may have higher volatility compared to stock and bond investments, it is not their primary motivation for investment.
Option D) None of the above - This option is incorrect. The correct answer is option A, as explained above.
The correct answer is option A) positive correlation of commodities with unexpected inflation. This option is correct because commodities are often seen as a hedge against inflation and tend to perform well during periods of unexpected inflation.