Rate of return 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 $15,000; and investment Y had a market value of $67,000. During the year, investment X generated cash flow of $1,125 and investment Y generated cash flow of $8,008. The current market values of investments X and Y are $15,547 and $67,000, 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.) The expected rate of return on investment Y is %. (Round to two decimal places.) b. Assuming that the two investments are equally risky, which one should Douglas recommend? Why? (Select the best answer below.) O A. Douglas should recommend investment Y because it has a lower rate of return and equal risk. O B. Douglas should recommend investment X because it has a higher rate of return and equal risk. O C. Douglas should recommend investment Y because it has a higher rate of return and equal risk. OD. Douglas should recommend investment X because it has a higher rate of return and lower risk