How to calculate a stock's expected return, variance, and standard deviation using probabilities

I start with a distribution of stock returns (probabilities and outcomes). I then compute the expected return, variance, and standard deviation using an Excel spreadsheet. Note these are population parameters, not estimates.

==

I'm a Finance Professor at the University of Tennessee in Knoxville. For more information about my teaching and research, please visit my website.

[yescarolinecansing]

so straight forward and helpful thank you

[jd]

There's no formulas in excel to get to G6 in one shot?

[Smiley_fan]

What about if you only have the expected return but no probabilities? How do you calculate the standard deviation?

[gerryc]

can someone help me with this problem Consider the following information:

State of Economy Probability of State of Economy Rate of Return if State Occurs
Stock A Stock B Stock C
Boom 0.25 0.18 0.37 0.27
Good 0.15 0.13 0.14 0.15
Poor 0.40 −0.01 −0.11 −0.04
Bust 0.20 −0.19 −0.16 −0.13
a. Your portfolio is invested 40 percent each in Stocks A and C and 20 percent in Stock B. What is the expected return of the portfolio? Find the variance and standard deviation. I got the expected return and it is 3.575 but I CANNOT GET the other two. please help

[tejesaladdin]

how to calculate probabilities for the return which is defined in this? Please let me know how it is.

[valdezmaury]

How did you "copy it down for each one" I keep having to manually put it into it. Sorry do not know excel

[TonyStark-zo]

you forgot to take first the mean of the variance and then the sqrt of it.