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Consider the following scenario analysis: Scenario Recession Normal economy Boon Probability 0.20 0.60 @.20 Rate of Return Stocks Bonds -69 174 194 94 304 54

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Consider the following scenario analysis: Scenario Recession Normal economy Boon Probability 0.20 0.60 @.20 Rate of Return Stocks Bonds -69 174 194 94 304 54 a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? O 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 c. Which investment would you prefer

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