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

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Calculate the expected rate of return and standard deviation for each investment.

Which investment would you prefer?

Consider the following scenario analysis:

Scenario Probability Rate of Return

Stocks Bonds

Recession $0.20 - 5 % 17 %$

Normal economy $0.50 20 % 9 %$

Boom $0.30 29 % 7 %$

Posted Date: May 11, 2024 05:20 AM

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

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