Economics/Statistics
posted by Susan on .
1. Assume that q and z are two random variables that are perfectly positively correlated. q takes the value of 20 with probability 0.5 and the value of zero with probability 0.5, while z takes the value of 10 with probability 0.5 and the value of zero with probability 0.5. What is the COVARIANCE of q and z?
(A) 50.
(B) 100.
(C) 0.
(D) 1.
(E) There is not enough information to tell.
(Solution is B, 100)

Because they are perfectly postively correlated, the covariance between the q and z is 1.00
Because, (while not explained or pointed out), the possible answers are expressed in percentage terms and the decimal point is moved over 2 places, the answer you seek is B.