Consider the following scenario analysis:

Scenario Probability Stocks Bonds

Recession 0.20 - 8% +17%

Normal Economy 0.20 +12 + 9

Boom 0.60 +28 +7

a. Calculate the expected rate of return

b. Calculate the standard deviation for each investment?

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

d. What is the rate of return on the portfolio?

e. What is the expected rate of return and standard deviation of the portfolio?

f. Calculate Coefficient of Variation