- Chapter 12 Financial Planning Exercise 1 Ranking Investments By Expected Returns What Makes For A Good Investment Use T 1 (27.6 KiB) Viewed 38 times
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Chapter 12 Financial Planning Exercise 1 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, and then soll it for $80 a share the stock pays annual dividends of $3 a share). % b. Buy a security for $20. hold it for 3 years, and then sell it for $60 (current income on this security is zero). Do not round intermediato calculations. % c. Buy a 1-year, 12 percent note for $940 (assume that the note hos a $1,000 par value and that it will be held to maturity). Do not round Intermediate calculations 46 From highest to lowest return, ranking is as follows Select M. Select Select