Question: Consider the following scenario analysis: Scenario - Probability - Rate of Return Stocks Bonds Recession 0 . 2 0 5 % 1 9 % Norm

Consider the following scenario analysis:
Scenario - Probability -Rate of Return
Stocks Bonds
Recession 0.205%19%
Norm econ 0.6020%10%
Boom 0.2027%4%
Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms?
Calculate the expected rate of return and standard deviation for each investment.
Which investment would you prefer?

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