5.Consider the following scenario analysis:

RateofReturn

ScenarioProbability StocksBonds

Recession0.203%18%

Normal economy 0.6019%9%

Boom 0.2028% 5%

Using the above table, answer questions A and B below.

a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms?

b. Calculate the expected rate of return and standard deviation for each investment. (Do not round intermediate calculations. Enter answers as a percent rounded to 1 decimal place.)