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You have been given with the following expectations about two stocks S and B States Probabilities S B 1 03 25% 15% 2 35% 20%

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You have been given with the following expectations about two stocks S and B States Probabilities S B 1 03 25% 15% 2 35% 20% 3 03 154 25% 04 1. Compute the expected return of the stock and the expected return of the stock 81 Mark) 2. Compute the risk of the stock and the risk of the stock 8 (2 Marks) 1. Explain with your own words, the concept of risk-return tradeoff (2 Marks) 4. If you would like to create a portfolio in which you decide to combine equally between Sand B. compute the expected return and the risk of this portfolio (3 Marks) 5. Explain the different types of risks related to the investment in stocks on the financial market (2 Marks)

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