Measuring Portfolio Risk: Expected Returns and Standard Deviation

Look at the problem below. It provides various economic scenarios with associated probabilities and possible rates of return depending on the occurrence of these scenarios. You are tasked with calculating the standard deviation of the portfolio. The figures are rounded off. 

1. Start with calculating expected returns:
   Expected Return=∑(Probability of Return×Possible Rates of Return)
2. Calculate the variance:
   • Find the difference between each possible rate of return and the expected return.
   • Square the result for each scenario.
   • Multiply the squared result by the probability of return for that scenario.
   • Sum up these values to calculate the variance.
3. Determine the standard deviation:
   • Take the square root of the variance to get the standard deviation of the portfolio.