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Commodity


A tangible item that may be traded between market participants: buyers and sellers. In this sense, commodities are marketable goods or wares, such as raw materials, partially processed items, farm products, precious metals, oil, etc. Intangibles (intangible products), such as human labor and services (transportation, marketing, advertising, etc.), are not commodities.

Commodities are associated with an array of risks (collectively known as commodity price risks). Consumers and producers of commodities are subject to price risk, which constitutes the uncertainty engulfing future commodity prices. For example, production risk arises from uncertainty associated with agricultural yields or mining output. The delivery of commodities from producers or traders to consumers suffers another type of risk: transportation risk. Currency risk exists when transactions on specific commodities take place cross-border: more than one currency is involved, and as a result transactions must be settled through currency conversions (applying an exchange rate). Commodity markets are also impacted by weather and climate-related risks which affect availability of commodities in the market as and when they are needed.



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Accounting is the language of business, everywhere, worldwide. It is the means by which virtually every business communicates information about its operations, irrespective of size, scale, objectives, ...
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