P8-1 (similar to) Question Help Rate of return Douglas Keel, a financial analyst for Orange Industries, wishes to estimate the rate of return for two similar-risk investments and Y. Douglas's research indicates that the immediate past retums will serve as reasonable estimates of future returns. A your earlier, investment had a market value of $28.000 and investment Y had a market value of $49,000. During the year, investment generated cash flow of $2,100 and investment Y generated cash flow of 56,054. The current market values of investments X and Y are $29.451 and $49,000, 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.)