Commodities as a source of "natural return"

[beboppin]

Anyone heard this before? It’s in one of the mock responses and I can’t find anything on what it even means.

Elsewhere they say a commodity index over time should earn the risk free rate minus costs. What happened to the natural return? Or is that all there was? I’m sure I’m confusing 2 issues here…

[Gersonides]

I think you’re referring to ‘convenience yield’ which is associated with owning certain physical commodoties, by having them on hand for use.

[mheithy]

bump