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Problem 11-18 Portfolio Analysis (LO3) Consider the following scenario analysis: Rate of Return Bonds Scenario Stocks Probability 0.3 Recession -6% 14% Normal economy 0.6 15 11 Boom 0.1 24 5 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.) Rate of Return 2.0 % Recession Normal economy 12.2 % 1.2 % Boom 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.) Expected return % Standard deviation %