1. If you decide to use the payback period model as a decision rule, what could it be an inconvenient at deciding between two projects based on that rule? What method can solve that problem?

2. If you are going to finance a project with equity and debt, where can you obtain both rates to compute the WACC?

3.The correlation between two assets is 1. This implies that to build a portfolio composed of those two assets is optimal in terms of reducing the risk (variance) of the portfolio. True or False and explain.