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RiskyCo and StableCo are seasonal businesses whose returns depend on the state of the economy. In the five equally-likely states of the world next year,

RiskyCo and StableCo are seasonal businesses whose returns depend on the state of the economy. In the five equally-likely states of the world next year, RiskyCo's (StableCo's) returns are expected to be: -12.00% (3.00%); -3.00% (7.00%); 4.00% (5.00%); 10.00% (5.00%); and 18.00% (5.00%) respectively. What is the correlation coefficient of the two companies' stock returns?

Question 3 options:

The correlation coefficient is .28.

The correlation coefficient is -.22.

The correlation coefficient is .22.

The correlation coefficient is .34.

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