# Two-stage stochastic linear optimization

I am familiar with the notion of two-stage stochastic optimization but I have not found any constructive examples so far, so I am stuck now on how to actually implement this on a given problem. The problem is:

Consider an investor with an initial wealth $$W_0$$. At time $$0$$, the investor constructs a portfolio comprising one riskless asset with return $$R_1$$ in the first period and one risky asset with return $$R_1^+$$ with probability $$0.5$$ and $$R_1^−$$ with probability $$0.5$$. At the end of the first period, the investor can rebalance her portfolio. The return in the second period is R2 for the riskless asset, while it is $$R_2^+$$ with probability $$0.5$$ and $$R_2^−$$ with probability $$0.5$$ for the risky asset. The objective is to meet a liability $$L_2 = 0.9$$ at the end of Period 2 and to maximize the expected remaining wealth $$W_2$$. Formulate a two-stage stochastic linear optimization to solves the investor’s problem.

I would deeply appreciate any helps on this!