Commodity Trading Advisers are best described as entities that

Commodity Trading Advisers are best described as entities that

• A. Provide custody and safekeeping for client assets.
• B. Engage in advising others as to the value or advisability of trading futures contracts or commodity options.
• C. Deal exclusively in physical commodities.
• D. Regulate exchanges and enforce futures trading rules.

Answer: (B)

Commodity Trading Advisers are professionals who provide advice about the futures markets. Their job is to analyze and recommend whether it’s wise to trade futures contracts or options on futures (and sometimes related instruments) for clients, and they may also manage client futures accounts. The key idea is advisory services focused on the value or advisability of trading in those instruments. That’s why the best description is that they engage in advising others about the value or advisability of trading futures contracts or commodity options. They’re not primarily custodians of assets, they don’t deal exclusively in physical commodities, and they aren’t the regulators who oversee exchanges and enforce trading rules.

Commodity Trading Advisers are professionals who provide advice about the futures markets. Their job is to analyze and recommend whether it’s wise to trade futures contracts or options on futures (and sometimes related instruments) for clients, and they may also manage client futures accounts. The key idea is advisory services focused on the value or advisability of trading in those instruments.

That’s why the best description is that they engage in advising others about the value or advisability of trading futures contracts or commodity options. They’re not primarily custodians of assets, they don’t deal exclusively in physical commodities, and they aren’t the regulators who oversee exchanges and enforce trading rules.