Certified Anti-Money Laundering Specialist Certification (CAMS) Practice Exam

What is defined as commodities?

1. Service-based products

2. Traded goods like food and metals

3. Luxury items sold in auction

4. Online digital assets

The correct answer is: Traded goods like food and metals

Commodities are defined as basic goods used in commerce that are interchangeable with other goods of the same type. This definition encompasses a wide range of traded goods, particularly raw materials and primary agricultural products, such as food items, metals, and energy products. These goods are often produced in bulk and are standardized, making them suitable for trading on exchanges. The focus on traded goods like food and metals highlights the essence of commodities: they are foundational elements of the economy that are bought and sold. For instance, agricultural products like wheat or corn, as well as metals like gold or silver, are frequently traded globally and are essential for various industries. In contrast, service-based products, luxury items sold at auction, and online digital assets do not fit this definition. Service-based products primarily involve intangible services rather than physical goods. Luxury items are typically unique and not interchangeable in the same way commodities are, and online digital assets represent a new class of goods that often do not have the same standardization or physical nature as traditional commodities. Therefore, the focus on traded goods in the correct answer aligns perfectly with the accepted definition of commodities in economic terms.