Sharon , The financial manager for Barnett Corporation, wishes to evaluate three prospective investments: X, Y, and Z. Currently, the firm earns 12% on its investments, which have a risk index of 6%. The expected return and expected risk of the investments are as follows:

Investment Expected return Expected risk index

	Expected return	Expected Risk
X	14%	7%
Y	12%	8%
Z	10%	9%

c. If she were risk-seeking, which investments would she select? Why?

d. Given the traditional risk preference behavior exhibited by financial managers, which investment would be preferred? Why?