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Mr. Santos just received his retirement incentives amounting to P1,000,000. He is planning to buy a small farm land so that he can have a simple life of planting fruit bearing trees and vegetables. However, there is an offer from his friend who wanted to borrow his money for a 10% interest per year for 5 years.

1. What will be the risk-return trade-off to be faced by Mr. Santos in making a decision? 2. Support your example with an explanation and show your computation.