onsider the following scenario analysis:

		Rate of Return
Scenario	Probability	Stocks		Bonds
Recession	0.20	8	%	16	%
Normal economy	0.50	19		9
Boom	0.30	25		6

a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms?

• 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.)