Homework Answers
| Rate of return | ||||||||||||
| Recession | 0.44% | |||||||||||
| Normal economy | 6.00% | |||||||||||
| Boom | 4.62% | |||||||||||
| Working: | ||||||||||||
| Stocks | Bonds | rate of return on the portfolio | ||||||||||
| Scenario | Probability | Return | Return | |||||||||
| a | b | c=a*b | d | e=a*d | x=(c*0.60)+(e*0.40) | |||||||
| Recession | 0.2 | -5% | -1.00% | 13% | 2.60% | 0.44% | ||||||
| Normal economy | 0.5 | 14% | 7.00% | 9% | 4.50% | 6.00% | ||||||
| Boom | 0.3 | 23% | 6.90% | 4% | 1.20% | 4.62% | ||||||
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HW8: Chapter 11 HW8: Chapter 11 Saved Consider the following scenario analysis: cate ility Stocks Scenario...
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