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Given the table below, what is the expected return to your portfolio? What is the standard...

Given the table below, what is the expected return to your portfolio? What is the standard deviation?

State Probability Return

Boom 30% 18%
Normal 60% 8%
Bad 10% -4%
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Answer #1
State Probability Return Probability Return Expected Return = Prob. x Return
Boom 30.00% 18.00% 5.40%
Normal 60.00% 8.00% 4.80%
Bad 10.00% -4.00% 0.40%
Expected Return 9.80%
Probability Return Return - Expected Return (Return - Expected Return)^2 (Return - Expected Return)^2 X probability
Boom 30.00% 18.00% 8.20% 0.67% 0.20%
Normal 60.00% 8.00% -1.80% 0.03% 0.02%
Recession 10.00% -4.00% -13.80% 1.90% 0.19%
Variance 0.41%
Standard Deviation=sqrt(variance) 6.42%
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