1-Giving the expected return and the risk of two portfolios, which portfolio (A or B) should you invest in? why?

	Expected Return	Risk ()
Portfolio A	13%	7%
Portfolio B	16%	11%

2-ABC Company has the following list of projects. The company has only $1,500,000 available for investment. Which projects should the company undertake? Why?

Projects	Initial Investment ($)	NPV
A	750,000	75,000
B	1,000,000	250,000
C	750,000	50,000
D	500,000	90,000
E	500,000	100,000

3-Giving the following 2 capital structures available to fund a project:

Capital Structure A					Capital Structure B
Sources of fund	Weight			Source of fund		Weight
Common shares	25%			Preferred shares		25%
Bonds	20%			Loan		35%
Retained earnings	45%			Bond		35%
Loan	10%			Common shares		5%

If both capital structures have WACC of 12.5%, which capital structure you recommend giving that the finance manager is risk seeker (taker)? Why?