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 retums will serve as reasonable estimates of future retums. A year earlier, investment X had a market value of $20,000, and investment Y had a market value of $55,000 During the year, investment X generated cash flow of $1,500 and investment Y generated cash flow of $6.000 The cument market values of investments X and Y are $25,000 and $55,000, respectively a Calculate the expected rate of retum on investments X and Y using the most recent year's data b. Assuming that the two investments are equally raky, which one should Douglas recommend? Why? The expected rate of return on investment X % (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) OA Douglas should recommend investment Y becsuse e has a higher rate of return and equal risk OB Douglas should recommend investment X because it has a higher rate of retum and equal risk OC Doughes should recommend investment Y because it has a lower rate of retum and equal risk OD. Douglas should recommend investment X because it has a higher rate of retum and lower risk