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1999 14.39 10.72 8-2 You are trying to decide whether to buy Banguard's Large Stock Equity Fund and/or its Treasury Bond Fund. You believe that

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1999 14.39 10.72 8-2 You are trying to decide whether to buy Banguard's Large Stock Equity Fund and/or its Treasury Bond Fund. You believe that next year involves several possible scenarios to which you have assigned probabilities. You have also estimated expected returms for each of the two funds for each scenario. Your spreadsheet looks like the following Bond Fund Rate of Return Stock Fund Rate Next Year's Pos- sibilities Column IF Probability of R Column D 15 0.15 0.05 0.6 0.2 -13 Weak econ Moderate econ Strong econ 10 24 -9 Exp value Exp value Fill in columns D and F and calculate the expected return for each fund. a. b. Given the expected value for each fund for next year, fill out the following spread sheet to calculate the standard deviation of each fund. Note that you need to fill in columns D, E, and F for the stock fund and columns H, I, and J for the bond fund. The first two columns in each set are labeled; you need to determine what goes in columns F and J, respectively, which will lead to the variance, and then the stand- ard deviation

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