Comparison of returns. WG Investors is looking at three different investment opportunities. Investment one is...
60.1K
Verified Solution
Link Copied!
Question
Finance
Comparison of returns. WG Investors is looking at three different investment opportunities. Investment one is a five-year investment with a cost of $410 and a promised payout of $820 at maturity. Investment two is a seven-year investment with a cost of $410 and a promised payout of $1,148. Investment three is a ten-year investment with a cost of $410 and a promised payout of $1,927, WG Investors can take on only one of the three investments. Assuming that all three investment opportunities have the same level of risk, calculate the effective annual return for each investment, and select the best investment choice. What is the effective annual return for investment one, a five-year investment with a cost of $410 and a promised payout of S820 at maturity? Round to two decimal places.) What is the effective annual retum for investment two, a seven-year investment with a cost of $410 and a promised payout of $1,148 (Round to two decimal places.) What is the effective annual return for investment three, a ten-year investment with a cost of $410 and a promised payout of $1,927 % (Round to two decimal places) Which is the best investment choice? (Select the best response.) O Investment one O Investment two O Investment three
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!