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Consider the following scenario analysis Rate of Return Scenario Recession Probability Stocks Bonds 0.20 -9% 20% 21 0.50 0.30 Normal economy 31 Boom a. Is
Consider the following scenario analysis Rate of Return Scenario Recession Probability Stocks Bonds 0.20 -9% 20% 21 0.50 0.30 Normal economy 31 Boom a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? No Yes 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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