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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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