2. Consider the following scenario analysis:

a. Is it reasonable to assume that Treasury bonds will provide higher returns in recessions than in booms? Yes or No

b. Calculate the expected rate of return and standard deviation for each investment. (Do not round intermediate calculations. Enter your answer as a percent rounded to 1 decimal place.)

c. Which investment would you prefer? Choose one from each-

Stock- more risk-adverse                Bond- more risk-adverse

            Less risk-adverse                              less risk-adverse

            Risk-neutral                                       Risk neutral