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.
Buy a stock for $50 a share, hold it for 3 years, then sell it for $80 a share (the stock pays annual dividends of $3 a share).
___________%
Buy a security for $25, hold it for 2 years, then sell it for $65 (current income on this security is zero). Do not round intermediate calculations.
___________ %
Buy a 1-year, 10 percent note for $940 (assume that the note has a $1,000 par value and that it will be held to maturity). Do not round intermediate calculations.
____________%