Business Math Unit 7

Topics: Investment, Commodity market, Agriculture Pages: 3 (1119 words) Published: August 27, 2013
Directions for Submitting Your Instructor Graded Assignment
You must show your work on all problems.  You may type your answer right into this document.  Total points for project:  45 points. Projects must be submitted as a Microsoft Word document and uploaded to the Dropbox for Unit 7. All Projects are due by Tuesday at 11:59 PM ET of the assigned Unit.  NOTE: Project problems should not be posted to the Discussion threads. Questions on the project problems should be addressed to the instructor by sending an email or by attending office hours. You will be able to come back to the Dropbox and view your graded work or in the Gradebook after your instructor evaluates it. Project

Today’s investigators have various investing options. One field of investment that can be very profitable in a short time is the worldwide commodities market. Commodities are tangible items such as grains (wheat, corn, rice), beef, hogs, pork bellies, metals (gold, silver, copper), or agricultural products (soybeans, cotton, orange juice). The commodities market is volatile: money can be made or lost quickly depending on unpredictable factors such as drought, flood, late or early frosts, hurricanes, workers’ strikes (mining, dock, or transportation), fuel price increases, fuel shortages, or political unrest. Grain companies, ranchers, and meat-packing houses invest in specific products to use in their businesses to “lock in” the price ahead of time. For example, in February a rancher may invest in 10,000 bushels of May corn to feed the cattle all summer. The February price may be low because numerous acres of May corn may have been planted worldwide. By May, the price may have increased dramatically due to floods wiping out the U.S. corn crop. The rancher would have saved money by purchasing the needed corn at the lower price. Other commodities investors, like you, who may have no personal knowledge of the commodities, typically invest in futures. A futures investor buys the rights to...
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