Consider an electric utility that may use either coal or natural gas to generate electricity. Under which of the following conditions is co-firing equipment least valuable? Let a_c be the annual standard deviation of coal prices, and let a_n be the annual standard deviation of natural gas prices and p the correlation between coal prices and natural gas prices.

Multiple Choice

• a_c high, a_n high, p low

• a_c high, a_n low, p low

• a_c low, a_n high, p low

• a_c low, a_n low, p high