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Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify its food business and lower its risks. It

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Treynor Pie Company is a food company specializing in high-calorie snack foods. It is seeking to diversify its food business and lower its risks. It is examining three companies-a gourmet restaurant chain, a baby food company, and a nutritional products firm. Each of these companies can be bought at the same multiple of earnings. The following represents information about all the companies. Correlation with Standard deviation Treynor Pie Sales Expected Earnings in Earnings Company Company (5 millions) (5 millions) (5 millions) Treynor Pie Company + 1.0 $ 139 $10 $ 4.0 Gourmet restaurant + 0.6 66 6 1.3 Baby food company + 0.1 57 3 1.7 Nutritional products company - 0.8 79 3.4 0-1 . Compute the coefficient of variation for each of the four companies (Enter your answers in millions (e.g., $100,000 should be entered as "10"). Round your answers to 3 decimal places.) Traynor Pro Company Gourmet restaurant Baby food company Nutritional products company Coefficient of Variation 0.400 0217 0 567 0.850 Activate Windows a-2. Which company is the least risky? Nutritional products company O Baby food company Gourmet restaurant O Treynor Pie Company a-3. Which company is the most risky? Treynor Pie Company O Baby food company Nutritional products company Gourmet restaurant b. Which of the acquisition candidates is most likely to reduce Treynor Ple Company's risk? O Nutritional products company Baby food company O Gourmet restaurant

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