Consider the following experience: i) Let U(W) be the utility function of an investors wealth, W. The first and second derivatives of U with respect to W are positive. Explain what these conditions imply about the investors economic characteristics. ii) You are given the following information on projects A and B: State of Nature Probability Return on Project A Return on Project B 1 10% -3% -2% 2 20% 4% 4.5% 3 50% 6% 7% 4 20% 12% 14% Explain with reasons which of the two projects the investor in (i) above should choose in order to maximise his expected utility of wealth. b) Outline the aims of risk identification phases of project finance. c) List and briefly explain five of the risks that are likely to be experienced under project finance. d) List the four main ways of mitigating risk in project finance. Which of these risk management strategies is more predominant under project finance and why