SCENARIO PERFROMANCE ANALYSIS Stocks (s) Bonds (b) (r-u)^2 P(r) * (r-u)^2 Scenario Probabili ty (p) ROR % (rs) p*r's (r-u)^2 P(r) * (r-u)^2 Square Deviatio n (SD) Dev2 (Is)-u (S) p* SD ROR % (ro) * r Square Deviation (SD) Dev2 (lb) u p* SD % % Recessio 35.0% Normal ( 40.0% Boom (Sb 25.0% -9.0% -0.03150 -0.15250 6.0% 0.02400] -0.00250 28.0% 0.07000 0.21750 0.02326 0.00001 0.04731 0.00814 0.00000 0.01183 5.0% 0.01750 7.5% 0.03000 -6.5% -0.01625 0.00156 0.00234 -0.00203 0.00035 0.00191 0.00926 0.00012 0.00077 0.00232 100.0% U(Mean) 6.250% Variance 0.02 Quest 2 3.125% % Variance 0.00 Q1: IS THE SUM OF PR Quest 3 Ub(Mean) 14.131% SQRT OF VAR Quest 4 5.661% SQRT OF VAR PORTFOLIO ANALYSIS (Asset Allocation) Asset All Weights (W%) Stocks (W 50% Bonds (W 50% (Ws *rs)+(Wb*rb) Scenario Probabili ty (p) ROR % (rs) p*r's (rs)-u (r-u)^2 P(r) * (r-u)^2 Deviatio Square Deviatio n for n Exp. Ret. (Dev.) (SD) Dev 2 (S) COVARIANCE & CORRELATION Stocks Bonds (Deviatio (Deviatio n from n from Ds * Db the the mean) mean) p* SD Covariance [p* (Ds Db) % 35.0% Recession Normal ( Boom (Sb -2.0% -0.00700] -0.06688 6.8% 0.02700 0.02063 10.8% 0.02688 0.06063 40.0% 25.0% 0.00447 0.00043 0.00368 0.00157 0.00017 0.00092 ??? ??? ??? ??? ??? ??? ??? ??? 100.0% Quest 5 4.688% % 0.00 Variance- Quest 6 5.152% % Covariance- Correlation Coefficient = Quest 7 SCENARIO PERFROMANCE ANALYSIS Stocks (s) Bonds (b) (r-u)^2 P(r) * (r-u)^2 Scenario Probabili ty (p) ROR % (rs) p*r's (r-u)^2 P(r) * (r-u)^2 Square Deviatio n (SD) Dev2 (Is)-u (S) p* SD ROR % (ro) * r Square Deviation (SD) Dev2 (lb) u p* SD % % Recessio 35.0% Normal ( 40.0% Boom (Sb 25.0% -9.0% -0.03150 -0.15250 6.0% 0.02400] -0.00250 28.0% 0.07000 0.21750 0.02326 0.00001 0.04731 0.00814 0.00000 0.01183 5.0% 0.01750 7.5% 0.03000 -6.5% -0.01625 0.00156 0.00234 -0.00203 0.00035 0.00191 0.00926 0.00012 0.00077 0.00232 100.0% U(Mean) 6.250% Variance 0.02 Quest 2 3.125% % Variance 0.00 Q1: IS THE SUM OF PR Quest 3 Ub(Mean) 14.131% SQRT OF VAR Quest 4 5.661% SQRT OF VAR PORTFOLIO ANALYSIS (Asset Allocation) Asset All Weights (W%) Stocks (W 50% Bonds (W 50% (Ws *rs)+(Wb*rb) Scenario Probabili ty (p) ROR % (rs) p*r's (rs)-u (r-u)^2 P(r) * (r-u)^2 Deviatio Square Deviatio n for n Exp. Ret. (Dev.) (SD) Dev 2 (S) COVARIANCE & CORRELATION Stocks Bonds (Deviatio (Deviatio n from n from Ds * Db the the mean) mean) p* SD Covariance [p* (Ds Db) % 35.0% Recession Normal ( Boom (Sb -2.0% -0.00700] -0.06688 6.8% 0.02700 0.02063 10.8% 0.02688 0.06063 40.0% 25.0% 0.00447 0.00043 0.00368 0.00157 0.00017 0.00092 ??? ??? ??? ??? ??? ??? ??? ??? 100.0% Quest 5 4.688% % 0.00 Variance- Quest 6 5.152% % Covariance- Correlation Coefficient = Quest 7