Question
Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 5 % 17 % Normal economy 0.50 20 9 Boom 0.30
Consider the following scenario analysis:
|
|
| Rate of Return | |||
| Scenario | Probability | Stocks | Bonds | ||
| Recession | 0.20 | 5 | % | 17 | % |
| Normal economy | 0.50 | 20 |
| 9 |
|
| Boom | 0.30 | 29 |
| 7 |
|
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 Expected Rate of Return= Standard deviation=
Bonds Expected Rate of Return= Standard deviation=
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