Consider the following scenario analysis:

 

		Rate of Return
Scenario	Probability	Stocks		Bonds
Recession	0.2	-7	%	15	%
Normal economy	0.7	16		9
Boom	0.1	25		6

 

Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds.

 

a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.)

 

 

 

 

b. What are the expected rate of return and standard deviation of the portfolio? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)