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Expected Rate of Return and Stock variance and Standard Deviation

1) Given the following data, What is the weight of security 1? Of security 2? 3? What is the expected return on the portfolio?

Security 1 ; $5,000 invested; Expected return 7%
Security 2; $7,000 invested; Expected return 9%
Security 3; $9,000 invested; Expected return 12%

2) The expected possible outcomes for Roxy Stock are below; what is the expected standard deviation of Roxy Stock?

State Probability Return
Super Boom 10% 35%
Boom 15% 20%
Expansion 45% 15%
Recession 30% -5%

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Solution Summary

The weight of three securities are calculated. After completing the calculation, the expected return of the portfolio is calculated. This solution also includes a calculation for variance of a stock based on the four different returns and the probability of the return. After completing the variance calculation, the standard deviation of the stock is calculated.