Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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.

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 $45 a share, hold it for 2 years, then sell it for $80 a share (the stock pays annual dividends of $3 a share). __________%

B) Buy a security for $25, hold it for 2 years, then sell it for $65 (current income on this security is zero). Do not round intermediate calculations. ____________ %

C) Buy a 1-year, 10 percent note for $960 (assume that the note has a $1,000 par value and that it will be held to maturity). Do not round intermediate calculations. ___________%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Evolution Of Nordic Finance

Authors: Steffen ElkiƦr Andersen

2011th Edition

0230241557, 978-0230241558

More Books

Students also viewed these Finance questions

Question

1. Define and explain culture and its impact on your communication

Answered: 1 week ago