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