Anjelo Jonathan a financial analyst for Blues Industries, wishes to estimate the rate of return for two similar-risk investments, X and Y. Anjelo’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 $20,000; 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 $6,800. The current market values of investments X and Y are $21,000 and $55,000, respectively. A.) Calculate the expected rate of return on investments X using the most recent year’s data. (Format: 11.11%) B.) Calculate the expected rate of return on investments Y using the most recent year’s data. (Format: 11.11%) C.) Assuming that the two investments are equally risky, which one should Anjelo recommend? (Investment X or Investment Y)
Anjelo Jonathan a financial analyst for Blues Industries, wishes to estimate the
A.) Calculate the expected rate of return on investments X using the most recent year’s data. (Format: 11.11%)
B.) Calculate the expected rate of return on investments Y using the most recent year’s data. (Format: 11.11%)
C.) Assuming that the two investments are equally risky, which one should Anjelo recommend? (Investment X or Investment Y)
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