# Expected rate of return and standard deviation

Scenario Analysis. Consider the following scenario analysis:

Rate of Return

Scenario Probability Stocks Bonds

Recession .20 -5% +14%

Normal economy .60 +15 +8

Boom .20 +25 +4

a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than

in booms?

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

c. Which investment would you prefer?

https://brainmass.com/business/accounting/expected-rate-of-return-and-standard-deviation-66727

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Scenario Analysis. Consider the following scenario analysis:

Rate of Return

Scenario Probability Stocks ...

#### Solution Summary

This discusses the steps to compute the expected rate of return and standard deviation

$2.19