Consider the following: Rate of Return Scenario Probability Stocks Bonds Recession .30 -8% 21% Normal Economy .50 22% 9% Boom .20 32% 9% a). Calculate the expected rate of return and standard deviation for each investment. (Don't round intermediate calculations, enter final answers as a percent rounded to 1 decimal place.) Expected Rate of Return Standard Deviation Stocks % % Bonds % %
Consider the following: Rate of Return Scenario Probability Stocks Bonds Recession .30 -8% 21% Normal Economy .50 22% 9% Boom .20 32% 9% a). Calculate the expected rate of return and standard deviation for each investment. (Don't round intermediate calculations, enter final answers as a percent rounded to 1 decimal place.) Expected Rate of Return Standard Deviation Stocks % % Bonds % %
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 26P
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Consider the following:
Scenario | Probability | Stocks | Bonds |
Recession | .30 | -8% | 21% |
Normal Economy | .50 | 22% | 9% |
Boom | .20 | 32% | 9% |
a). Calculate the expected rate of return and standard deviation for each investment. (Don't round intermediate calculations, enter final answers as a percent rounded to 1 decimal place.)
Expected Rate of Return | Standard Deviation | |
Stocks | % | % |
Bonds | % | % |
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