K7 i Consider the following scenario analysis: Scenario Recession Normal economy Boom Rate of Return Probability StocksBonds 0.20 -4% 19% 0.40 20% 9% 0.40 26% 8% a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? O No O 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 Standard Deviation Return Stocks Bonds c. Which investment would you prefer? Which investment would you prefer? Stock less risk-averse Bond more risk-averse