Question
The cash flows from two projects under different states of the economy are as follows: State of the economy Probability Project A Project B Poor
The cash flows from two projects under different states of the economy are as follows:
| State of the economy | Probability | Project A | Project B |
| Poor | 10% | $13,000 | $0 |
| Average | 20% | $14,000 | $7000 |
| Good | 70% | $16,000 | $16,000 |
Find the coefficient of correlation between the two projects.
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Multinational Business Finance
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
15th edition
134796551, 134796550, 978-0134796550
