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Idaho Slopes (IS) and Dakota Steppes (DS) are both seasonal businesses. IS is a downhill skiing facility, while DS is a tour company that specializes in walking tours and camping. The returns on each company over the next year are expected to be:

Economy; Idaho Slopes; Dakota Steppes

Strong Downturn; -10%; 2%

Mild Downturn; -4%; 7%

Slow Growth; 4%; 6%

Moderate Growth; 12%; 4%

Strong Growth; 20%; 4%

29. The covariance between the IS and DS returns is:
(A) .00187
(B) .00240
(C) .00028
(D) .000056

30. The correlation between the returns of IS and DS is:
(A) +1.0
(B) -1.0
(C) +.3
(D) 0.03

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Solution Summary

Idaho Slopes and Dakota Steppes economic analysis of businesses