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 $23,000, and investment Y had a market value of $47,000. During the year, investment X generated cash flow of $1,725 and investment Y generated cash flow of $5,927. The current market values of investments X and Y are $24,181 and $47,000, 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