The correlation coefficient between the return on the existing project and the return on a proposed foreign
Fantastic news! We've Found the answer you've been seeking!
Question:
The correlation coefficient between the return on the existing project and the return on a
proposed foreign project is 1. The returns on the existing project and the new project are
equal. The existing project has a lower standard deviation than the proposed project. If
the proposed project is adopted, the variance of the firm's overall returns will:
decrease
none of the options listed
need additional information
increase
decrease or increase, depending on the exact size of the returns and standard deviations
Posted Date: