its Treasury Bond Fund. You believe that next year involves several possible scenarios to which you have assigned probabilities. You have also estimated expected returns for each of the two funds for each scenario. Your spreadsheet looks like the following 8-2 You are trying to decide whether to buy Banguard's Large Stock Equity Fund and/or Fund Rate Column Stock Fund Rate Next Year's Pos- sibilities of ReturnColumn D of ReturnColumn F Probability 15 -13 Weak econ Moderate econ Strong econ 0.15 0.05 0.6 0.2 10 24 Exp value = Exp value a. Fill in columns D and F and calculate the expected return for each fund. 220 CHAPTER 8PORTFOLIO SELECTION AND ASSET ALLOCATION Stock Fund Bond Fund Column E Column D Forecast Deviation Squared Scenario Probability Return from Exp. Deviation Column F Return Column H Column I Forecast Deviation Squared from Exp. Deviation Column 0.15 0.05 0.6 -13 15 Weak econ 10 Stron econ 0.2 24 Variance Variance Std dev Std dev =