Please focus on Required B question. only the STOCKS expected rate of return is correct so far. need help with the rest of the question

Consider the following scenario analysis:

		Rate of Return	Rate of Return
Scenario	Probability	Stocks	Bonds
Recession	0.30	-7%	18%
Normal Economy	0.60	20%	10%
Boom	0.10	26%	3%

A. Is it reasonable to assume that Treasury bonds will provide higher returns in recession that in booms?

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

C. Which investment would you prefer?

A. CORRECT ANSWER YES

B.

	Expected Rate of Return	Standard Deviation
Stocks	12.5% (correct)	%
Bonds	%	%

C.

	Stock	Bond
Which investment would you prefer?	Less risk-averse (correct)	More Risk-averse (correct)