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What is the rate of return on the portfolio in each scenario

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Reference no: EM132565670

Consider the following scenario analysis:

                                            Rate of Return

Scenario                     Probability          Stocks              Bonds

Recession                      0.3                -4%                  16%

Normal economy               0.5                    17                   10

Boom                               0.2                     26                    3

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

Question 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

Rescission %

Normal Ecomony %

Boom %

Reference no: EM132565670

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