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Are my answers correct?? If not, can you please show me how to figure this out and what the answers are? Consider the following scenario
Are my answers correct?? If not, can you please show me how to figure this out and what the answers are?
Consider the following scenario analysis: 5 Scenario Recession Normal economy Boom Probability 0.20 0.60 0.20 Rate of Return Stocks Bonds -6% 17% 19% 9% 30% 5% 5.88 points a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? O No Yes b. Calculate the expected rate of return and standard deviation for each investment. (Do not round intermediate calculations. Enter your answers as a percent rounded to 1 decimal place.) Stocks Bonds Expected Rate of Return Standard Deviation 16.21% 9.8% 9.8% 5.0:% min c. Which investment would you prefer? Stock Bond more risk-averse Which investment would you prefer? less risk-averseStep by Step Solution
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