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Consider the following scenario analysis: Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds. 20. Rate of Return Probability Stocks Bonds

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Consider the following scenario analysis: Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds. 20. Rate of Return Probability Stocks Bonds 0.2-7% 15% Scenario Recessiorn Normal economy 0.6 16 8 Boom 0.2 27 6 What is the expected return during recession? a. b. C. d. 12.8% 6% 1.8% 1.2% 21. Continuing on previous question 20 what is the expected return of the portfolio? a. b. c. d. 11.76% 12.8% 18.6% 24.0%

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