Answer: equal-weighted and rebalanced annually.

## Explanation For an investor who: 1. Believes commodity prices trend 2. Wants an index not dominated by any one commodity The most appropriate choice is **A: equal-weighted and rebalanced annually** **Why equal-weighted:** - Equal weighting ensures no single commodity dominates the index - Each commodity has the same weight, providing diversification - This prevents concentration risk in any single commodity **Why annual rebalancing:** - For trending markets, less frequent rebalancing is better - Annual rebalancing allows trends to play out - More frequent rebalancing (monthly) would cut off potential trends prematurely **Why not production-weighted:** - Production-weighted indexes can be dominated by commodities with high production volumes - This contradicts the investor's goal of avoiding domination by any single commodity Therefore, **A: equal-weighted and rebalanced annually** best meets both criteria.

Author: LeetQuiz Editorial Team