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pnaniechambers 9 PM CST h12 Financial Planning Exercise 1 Question 1 ofS Check My Work eBook Chapter 12 Financial Planning Exercise 1 Ranking investments by

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pnaniechambers 9 PM CST h12 Financial Planning Exercise 1 Question 1 ofS Check My Work eBook 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 $50 a share, hold it for 3 years, then sell it for $80 a share (the stock pays annual dividends of $3 a share). 18.40 % b. Buy a security for $25, hold it for 2 years, then sell t for $65 (current income on this security is zero). Do not round intermediate calculations. 17.02 % c. Buy a 1-year, 10 percent note for $940 (assume that the note has a $1,000 par value and that it will be held to matunity). Do not round intermediate calculations. 17.02 % w 8 7 8 9 0 6

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