Consider the following scenario analysis: Scenario Probability Rate of return Stocks / Bonds Recession 0.2 -5% /
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Question:
Consider the following scenario analysis:
Scenario Probability Rate of return
Stocks / Bonds
Recession 0.2 -5% / 13%
Normal economy 0.7 14 / 10
Boom 0.1 25 / 4
assume a portfolio 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.)
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