The returns on Stocks X and Y are as follows: Year Return on Stock X Return on Stock Y 2015 -4% 10% 2016 18% 16% 2017 32% 19% a) Calculate the covariance between the returns on the two stocks (X and Y). PLEASE SHOW AND UPLOAD ALL OF YOUR WORK UNDERLYING YOUR ANSWERS.

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Before understanding the concept of Risk and Return in Financial Management, understanding the two-concept Risk and return individually is necessary. 

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Capital asset pricing model, also known as CAPM, shows the relationship between the expected return of the investment and the market at risk. This concept is basically used particularly in the case of stocks or shares. It is also used across finance for pricing assets that have higher risk identity and for evaluating the expected returns for the assets given the risk of those assets and also the cost of capital.