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What are the expected rate of return and standard deviation

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Reference no: EM132885062

Consider the following scenario analysis:

Rate of Return

                              Scenario                   Probability              Stocks Bonds

Recession            0.3                            -3 %                    12 %

Normal economy       0.6                            13                     8

Boom                       0.1                           26                     3

Assume a portfolio with weights of 0.60 in stocks and 0.40 in bonds.

Problem a. What is the rate of return on the portfolio in each scenario? (Enter your answer as a percent rounded to 1 decimal place.)

Problem 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.)

Reference no: EM132885062

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