PLEASE ANSWER QUESTIONS 1 AND 2.

Expected Rate of return
Scenario	Probability	T-Bills	S&P 500	Utility Company	High-Tech Company	Counter-Cyclical Company
Recession	20%	5%	-10%	6%	-25%	20%
Near Recession	20%	5%	-6%	7%	-20%	16%
Normal	30%	5%	12%	9%	15%	12%
Near Boom	10%	5%	15%	11%	25%	-9%
Boom	20%	5%	20%	14%	35%	-20%

Based on the above returns, Jenna calculated the betas of the three stocks as follows:

Beta of Utility Company = 0.22

Beta of High-Tech Company = 2.02

Beta of Counter-Cyclical Company = -1.13

Imagine you are Jenna. Prepare a report for Kevin to help him understand the concepts of risk and return. Include the following things in your report (dont just copy from the textbook, explain things in your own words):

How would you explain to Kevin the relationship between risk and return of individual stocks?

Kevin has no idea what beta means and how it is related to the required return of the stocks. Help him to understand these concepts.