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Consider the following scenario analysis: Rate of Return Scenario Probability Stocks Bonds Recession 0.20 8 % 16 % Normal economy 0.50 19 % 9 %

Consider the following scenario analysis:

Rate of Return
Scenario Probability Stocks Bonds
Recession 0.20 8 % 16 %
Normal economy 0.50 19 % 9 %
Boom 0.30 25 % 6 %

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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