What makes for a good investment

Reference no: EM132068050

Question: Ranking investments by 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 3 years, then sell it for $75 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 $60 (current income on this security is zero). Do not round intermediate calculations.______ %

c. Buy a 1-year, 12 percent note for $950 (assume that the note has a $1,000 par value and that it will be held to maturity). Do not round intermediate calculations. _____%

Reference no: EM132068050

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