An investor is contemplating an investment with a retum of R, where: R=300,000-500,000 where U is a uniform [0, 1] random variable. Calculate each of the following four measures of risk: (a) variance of return (b) downside semi-variance of return shortfall probability, where the shortfall level is 100,000 Value at Risk at the 5% level. (d) (i) Define first-order and second-order stochastic dominance. Illustrate the definitions by sketching cumulative distribution functions of two random variables which spent the retume on two investments, one of which dominates the other. [5] (i) Explain how an investor's economic characteristics will affect his choice of an investment that: (a) first-order stochastically dominates another (b) second-order stochastically dominates another. [3] [Total 8]