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You own two investments, A and B , that have a combined total value of $ 3 3 , 1 0 0 . 0 0

You own two investments, A and B, that have a combined total value of $33,100.00. Investment A is expected to pay $850.00 per year forever; its next paymentis expected in 1 year; and its expected return is 6.03 percent per year. Investment B is also expected to make annual payments forever and make its next payment in 1 year. Investment B'S next payment is expected to be $984.00 and all subsequent payments are expected to grow by 0.57 percent per year forever. What is the annual expected return for investment B?5.18%(plus or minus 3 bps)5.75%(plus or minus 3 bps)3.54%(plus or minus 3 bps)2,97%(plus or minus 3 bps) none of the answers are within 3 bps of the correct answer

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