answer the questions and do the calculations in all exercises that require mathematical calculations.

1*If a person requires greater performance when the risk increases, that person is said to be _________________________. (example: risk seeker, indifferent to risk, feel risk aversion)

2*What is risk in the financial context? Explain

3*Define performance and describe how to calculate the rate of return on an investment.

4*In general, the lower the correlation between the return on assets, the greater the risk diversification potential. (true or false)

5*A company is evaluating a proposal that has an initial investment of $ 50,000 and cash flows of $ 15,000 per year for five years. The project investment recovery period is ___________:

6*Given the information in the table below and a capital cost of 15%, determine the NPV of the investment. Should the project be accepted, yes or no? Why? Explain

ANNUAL CASH FLOW

INITIAL INVESTMENTS