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%

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.

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