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Homework: Ch 8 Pre HW Save Score: 0 of 1 pt 1 of 6 (0 complete) HW Score: 0%, 0 of 6 pts P8-1 (similar
Homework: Ch 8 Pre HW Save Score: 0 of 1 pt 1 of 6 (0 complete) HW Score: 0%, 0 of 6 pts P8-1 (similar to) Question Help Rate of retum Douglas Keel, a financial analyst for Orange Industries, wishes to estimate the rate of return for two similar-risk investments, X and Y. Douglas's research indicates that the immediate past returns will serve as reasonable estimates of future returns. A year earlier, investment X had a market value of $16,000, and investment Y had a market value of $42,000. During the year, investment X generated cash flow of $1,200 and investment y generated cash flow of $6,010. The current market values of investments X and Y are $16,561 and $42,000, respectively a. Calculate the expected rate of return on investments X and Y using the most recent year's data. b. Assuming that the two investments are equally risky, which one should Douglas recommend Why? a. The expected rate of return on investment X is % (Round to two decimal places.) Enter your answer in the answer box and then click Check Answer Clear All Chock Answer 2 pemaining
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