Consider an Electric Utility That May Use Either Coal or Natural

question 39

Multiple Choice

Consider an electric utility that may use either coal or natural gas to generate electricity. Under which of the following conditions would it be the least valuable to have co-firing equipment? Let a c be the annual standard deviation of coal prices, and let a n be the annual standard deviation of natural gas prices, and p the correlation between coal prices and natural gas prices.

• A) a c high, a n high, p low.
• B) a c high, a n low, p low.
• C) a c low, a n high, p low.
• D) a c low, a n low, p high.

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Definitions:

Residents

are people who live in a particular locality or are inhabitants of a specific area or city.

Beach

A natural landform alongside a body of water, typically consisting of sand, pebbles, or rocks, where people often go for recreation.

Residents

Individuals who inhabit a particular place or area, living in a specific locale either temporarily or permanently.

Utility Function

Represents how different combinations of goods or services can provide varying levels of satisfaction or utility to an individual, emphasizing the subjective valuation of consumption.