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 for each proposal are given as follows: Expected net present value Standard deviation 10,000 4,000 8,000 3,000 $6,000 4,000 Assuming the following correlation coefficients for each possible two-project combina tion, which combination dominates the others? PROPOSAL COMBINATIONS 1 with 2 1 with 3 2 with 3 CORRELATION COEFFICIENTS 0.60 0.40 0.50