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Consider the following scenario analysis: Scenario Probability Rate of Return Stocks Bonds Recession 0.3 4% 16% Normal economy 0.5 17 10 Boom 0.2 26 3
Consider the following scenario analysis:
| Scenario | Probability | Rate of Return | |
|---|---|---|---|
| Stocks | Bonds | ||
| Recession | 0.3 | 4% | 16% |
| Normal economy | 0.5 | 17 | 10 |
| Boom | 0.2 | 26 | 3 |
Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds.
- What is the rate of return on the portfolio in each scenario?
- What are the expected rate of return and standard deviation of the portfolio?
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The Routledge Handbook Of Responsible Investment
Authors: Tessa Hebb, James Hawley, Andreas Hoepner, Agnes Neher, David Wood
1st Edition
0415624517, 978-0415624510
