1. You would like to invest $16,000 in a portfolio with an expected return of 12.3%. You are considering two securities, T and Y. Stock Y has an expected return of 10.6% and Y has an expected return of 15.3%. How much should you invest in stock T if you invest the balance in stock Y?

2. The cash flows for Project A is shown below with the appropriate cost of capital at 10.5 percent and the maximum allowable payback is four years. Project A TIME 0 1 2 3 4 5 Cash Flow $ –960 $ 260 $ 390 $ 640 $ 200 $ 160 Compute the payback period for Project A. (Round your answer to 2 decimal places.) Payback period years Should the project be accepted or rejected?