Posted: May 13th, 2018

Kaplan MM 255 Business Math Unit 7 Project

You must show your work on all problems. You may type your answer right into this document. Totalpoints for project: 45 points. Projects must be submitted as a Microsoft Word document and uploadedto 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 projectproblems should be addressed to the instructor by sending an email or by attending office hours. Youwill be able to come back to the Dropbox and view your graded work or in the Gradebook after yourinstructor evaluates it.ProjectTodays investigators have various investing options. One field of investment that can be veryprofitable in a short time is the worldwide commodities market. Commodities are tangible items suchas grains (wheat, corn, rice), beef, hogs, pork bellies, metals (gold, silver, copper), or agriculturalproducts (soybeans, cotton, orange juice).The commodities market is volatile: money can be made or lost quickly depending on unpredictablefactors such as drought, flood, late or early frosts, hurricanes, workers strikes (mining, dock, ortransportation), fuel price increases, fuel shortages, or political unrest. Grain companies, ranchers, andmeat-packing houses invest in specific products to use in their businesses to lock in the price aheadof time. For example, in February a rancher may invest in 10,000 bushels of May corn to feed thecattle all summer. The February price may be low because numerous acres of May corn may havebeen planted worldwide. By May, the price may have increased dramatically due to floods wiping outthe U.S. corn crop. The rancher would have saved money by purchasing the needed corn at the lowerprice.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 purchase products that have not yetbeen produced at a specific price, with the hope that the price will increase before the investment issold. Because commodity figures are typically held less than a year before selling, a commoditiesmarket investor must be prepared to lose the entire investment in a short time, usually with nowarning.Suppose that you invest $10,000 in an agricultural crop commodity today.1. What commodity did you select? Why?2. Use the internet to check todays prices as listed in the U.S. Department of Agricultures crop reports at their worldwide website: www.usda.gov.a. What is the price now?b. What was the price a year ago?c. If you bought the commodity one year ago at the price back then; then would you have made a profit or loss based on the price today?d. For your profit or loss, write a sentence offering a possible explanation for the profit or loss?3.Research the benefits and risks associated with annuities. Based on your research,select one particular type of annuity in which you might consider investing. Write a page paper – Describe why you have selected this annuity and how it fits into your personal financial picture. Note: You do not  need to disclose personal financial details, just be specific about how this annuity fits your plans.

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