Commodity broker-traders
A) Produce or raise commodities such as corn, wheat, or precious metals.
B) Hold their inventory primarily to sell the commodities in the near term and generate a profit from price fluctuations.
C) Value their inventories at the lower-of-cost-or-net realizable value (LCNRV).
D) All of the choices are correct regarding broker-traders.

Question

Quizplus · Accepted Answer

Commodity broker-traders hold their inventory primarily to sell the commodities in the near term and generate a profit from price fluctuations. They do not produce or raise the commodities themselves (option A), and their inventory valuation depends on the market value and not LCNRV (option C). Therefore, option B is the correct choice.

Commodity Broker-Traders