Homework: Homework Ch8 Drew Fields & 09/01/20 12:01 AM Save Score: 0 of 3 pts 7 of 18 (0 complete) HW Score: 0%, 0 of 40 pts P8-1 (similar to) Question Help 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 returns. A year earlier, investment X had a market value of $13,000, and investment Y had a market value of $47.000. During the year, investment X generated cash flow of $975 and investment Y generated cash flow of $4,940. The current market values of investments X and Y are $13,420 and $47,000, respectively a. Calculate the expected rate of return on investments X and Y using the most recent year's data, b. Assuming that the two investments are equally risky, which one should Douglas recommend? Why? a. The expected rate of return on investment X is % (Round to two decimal places.) ai ce Enter your answer in the answer box and then click Check Answer. 2 parts remaining Clear All Check Answer an Tools > BD go 12:01 A 9/1/2012