Consider the following scenario analysis:

Rate of Return

Scenario Probability Stocks Bonds

Recession 0.3 -6% 18%

Normal Econ 0.4 19 8

Boom 0.3 22 5

Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds.

a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.)

Recession ____%

Normal Econ ______%

Boom _____%

b. What are the expected rate of return and standard deviation of the portfolio? (Enter your answer as a percent rounded to 2 decimal places.)

Expected return _____%

Standard Deviation _____%