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Problem:

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.

a. Buy a stock for $30 a share, hold it for three years, and then sell it for $60 a share (the stock pays annual dividends of $2 a share)

b. Buy a security for $40, hold it for two years, and then sell it for $100 (current income on this security is zero)

c. Buy a one-year, 5 percent note for $1,000 (assume that the note has a $1,000 par value and that it will be held to maturity)

Note: Explain in detail.

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Basic Finance, Finance

Category:- Basic Finance
Reference No.:- M91147848

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