Problem 11-13 Scenario Analysis (LO2) Consider the following scenario analysis. Scenario Recession Normal economy Boom Probability 0.20 0.60 0.20 Rate of Return Stocks Bonds -5% 19% 20% 10% 27% 4% a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? O No Yes b. Calculate the expected rate of return and standard deviation for each investment. (Do not round interme your answers as a percent rounded to 1 decimal place.) Expected Rate of Return % Standard Deviation Stocks Bonds 9 w % % c. Which investment would you prefer? Which Investment would you prefer? Stock Bond