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Consider the following scenario analysis: Rate of Return ProbabilityStocks Bonds -6% Scenario Recession 17% 0.20 Normal economy 0.50 20 Boom 0.30 29 6 a. Is
Consider the following scenario analysis: Rate of Return ProbabilityStocks Bonds -6% Scenario Recession 17% 0.20 Normal economy 0.50 20 Boom 0.30 29 6 a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? O No O 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.) Expected Rate of Return Standard Deviation Stocks Bonds %
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