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Consider the following scenario analysis: Rate of Return Stocks Bonds Scenario Recession Normal economy Boom Probability 0.20 0.50 0.30 198 268 a. Is it reasonable

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Consider the following scenario analysis: Rate of Return Stocks Bonds Scenario Recession Normal economy Boom Probability 0.20 0.50 0.30 198 268 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.) Stocks Bonds Expected Rate of Standard Deviation Return 16.1% 11.5/%

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