Required: Using all the appropriate measures advice Mrs. Teresa on the best farming business to venture in. Give a well detailed justification for your answer.
Required: Using all the appropriate measures advice Mrs. Teresa on the best farming business to venture in. Give a well detailed justification for your answer.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Required:
Using all the appropriate measures advice Mrs. Teresa on the best farming business to venture in. Give a well detailed justification for your answer.
Transcribed Image Text:Mrs. Teresa is interested in starting a farming business. She is considering venturing into either
strawberry farming or onion farming. She has consulted a financial advisor who established probable
returns for these two types of farming businesses and the probability of occurring depending on different
weather conditions. This information is as shown below:
the Return for Strawberry Return for onion
farming in %
Weather conditions
Probability
for
weather conditions
farming in %
Sunny and Dry
0.3
3%
-5%
Low rainfall
0.2
8%
8%
Moderate rainfall
0.3
15%
25%
High rainfall
0.1
12%
15%
Flooding
0.1
-10%
- 4%
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