how to calculate the standard deviation of expected return?
The standard deviation can be found by taking the square root of the variance. Therefore, the portfolio standard deviation is 16.6% (√(0.5²*0.06 + 0.5²*0.05 + 2*0.5*0.5*0.4*0.0224*0.0245)). Standard deviation is calculated, much like expected return, to judge the realized performance of a portfolio manager.