Question: Suppose that - in any given time period - a certain stock is equally likely to go up 2 units or down 1 unit, and

Suppose that - in any given time period - a certain stock is equally likely to go up 2

units or down 1 unit, and that the outcomes of different periods are independent. Let

X be the amount the stock goes up (either 2 or -1) in the first period, and let Y be the

cumulative amount it goes up in the first three periods. Find the correlation between X

and Y.

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