Consider the following scenario analysis:

Rate of Return

Scenario Probability Stocks Bonds

Recession .20 7% 20%

Normal economy .60 2211

Boom .20 337

a .Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms?

Yes ____

No_ __

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 ofReturn Standard Deviation

Stocks % %

Bonds % %