Which capital structure would you recommend?

Question 1. (25 marks)You are considering the following two stocks for your portfolio and have observed the following. The risk free rate is 0.015 and…

Question 1. (25 marks)You are considering the following two stocks for your portfolio and have observed the following. The risk free rate is 0.015 and you are considering investing 50% of your funds in Stock A and 50% in Stock B.Calculate the following.a) Expected Return of Stock A (.5 mark)b) Expected Return of Stock B (.5 mark)c) Variance of Stock A (.5 mark)d) Variance of Stock B (.5 mark)e) Standar …f)    Which capital structure would you recommend? Wh
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