Chapter 12 Financial Planning Exercise 1 Ranking investments by expected returns What makes for a good investment? Use the approximate yield formula or a financial calculator to rank the following investments according to their expected returns. Round the answers to two decimal places. Do not round intermediate calculations a. Buy a stock for $45 a share, hold it for 2 years, then sell it for $80 a share the stock pays annual dividends of $3 a share). b. Buy a security for $25, hold it for 2 years, then sell it for $65 (current income on this security is zero). Do not round intermediate caldations c. Buy a 1-year, 10 percent note for $960 (assume that the note has a $1,000 par value and that it will be held to maturity). Do not round intermediate calculations. Questions Navigation Menu Ercise 18 Clean and dirty bond prices You have decided to sell a 6 percent semiannual coupon bond two months after the last coupon payment. The bond is currently selling for $975.00. Answer the following questions about the bond. Assume that the par value of the bond is $1,000. Round your answer to nearest cent a. What is the dean price of the bond? b. What is the dirty (full) price of the bond? c. Explain how the clean and dirty prices of the bond are relevant to the buyer of the bond. blank