The Flotsam and Jetsam Wreckage Company will invest in two of three possible proposals, the cash flows of which are normally distributed. The expected net present value (discounted at the risk-free rate) and the standard deviation of each proposal are given as follows: Proposal 2 3 Expected net present value $10,000 $8,000 $6,000 Standard deviation 4,000 3,000 4,000 Assuming the flowing correlation coefficients for each possible two-project combination, which combination dominates the others? Proposal combinations 1 with 2 1with 3 2 with 3 Correlation coefficients 0.6 0.4 0.5