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Finance 3663 - Investments (section 5408) SW Southwestern w as 2. Expected Returns and Risk Marc's Ferrari Driving Company (MFDC) is taking advantage of their
Finance 3663 - Investments (section 5408) SW Southwestern w as 2. Expected Returns and Risk Marc's Ferrari Driving Company (MFDC) is taking advantage of their unexpected success. They are launching a subsidiary called Marc's Snowmobile and Zamboni Driving Company (MSDC). Even more surprising is that they launching In Weatherford. You have predicted what their likely income will be in different weather conditions, along with the probability of those weather conditions occurring. (Your analysis is presented in the table below.) Weather Probability Projected Earnings ($1000's) Cool Warm/Cloudy Hot and Sunny Cold and Snowy 3% 25% 70% 2% 111 22 -33 777 What are the expected earnings for this new venture? What is the risk of this new venture? (calculate the risk per our definition of risk) c) If a potential investor wanted to be confident that this business would be profitable each year, what would yo tell them (use evidence from your analysis to support your explanation)? Finance 3663 - Investments (section 5408) SW Southwestern w as 2. Expected Returns and Risk Marc's Ferrari Driving Company (MFDC) is taking advantage of their unexpected success. They are launching a subsidiary called Marc's Snowmobile and Zamboni Driving Company (MSDC). Even more surprising is that they launching In Weatherford. You have predicted what their likely income will be in different weather conditions, along with the probability of those weather conditions occurring. (Your analysis is presented in the table below.) Weather Probability Projected Earnings ($1000's) Cool Warm/Cloudy Hot and Sunny Cold and Snowy 3% 25% 70% 2% 111 22 -33 777 What are the expected earnings for this new venture? What is the risk of this new venture? (calculate the risk per our definition of risk) c) If a potential investor wanted to be confident that this business would be profitable each year, what would yo tell them (use evidence from your analysis to support your explanation)
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