Risk and Rate of Return Stock Fund Rate of Return Scenario Probability 0.3 Bond Fund Rate of Return 0.16 Recession -0.11 Scenario Probability Recession Normal Stock Fund Bond Fund Rate of Return Rate of Return 0.3 -0.08 0.14 0.4 0.18 0.08 0.3 0.25 -0.06 Normal 0.4 0.13 0.06 Boom 0.3 0.27 -0.04 Boom 1. Please Calculate Ecpected Rate of Return for Stock and Funds pected Rate of Return Stock Fund 10.007 Bond Fund 6.007 10.00% 6.00% 12.30% 5.60% 2. Please Calculate Expected Variance for Stock and Bonc Funds Variance Stock Fund 0.02226 Bond Fund 0.00600 0.02226 0.00600 0.01850 0.00638 3. Please Calculate Standard Deviation for Stock and Bond Funds Standard Deviation Stook Fund 14.92% Bond Fund 7.75% 14.92% 7.75% 13.60% 7.99% 4. Please Calculate Portfolio Expected Rate of Return. You invest $60,000 in stock fund and $40,000 in Bond fund Funds Stock Fund Bond Fund $ Investments 60,000.00 40,000.00 100,000.00 Z Weight of Investment 6021 407 60% 40% $ Portfolio Expected Rate of Return 8.400% 8.402 9.62% 5. Please Calculate Portfolio Standard Deviation using portfolio weights in 14 Let's Compute portfolio return each state Stock Fund Bond Fund Scenario Probability Rate of Return Rate of Return Recession 0.3 -0.11 0.16 Normal 0.4 0.13 0.06 Boom 0.3 0.27 -0.04 Portfolio Return -0.20% -0.20%. 0.80% 10.207 14.60% 10.20% 14.60% 14.00% 12.60% Portfolio Standard Deviation 5.9174% 5.80317