The Federal funds rate is multiple choice the interest rate the banks charge on loans to their most creditworthy customers, whereas the prime interest rate is the interest rate banks charge one another on overnight loans. Incorrect the interest rate the Fed charges banks for a loan, whereas the prime interest rate is the interest rate banks charge one another on overnight loans. the interest rate the government charges for government loans, whereas the prime interest rate is the interest rate banks change on loans to their most creditworthy customers. the interest rate the banks charge one another on overnight loans, whereas the prime interest rate is the interest rate banks change on loans to their most creditworthy customers.

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 returns will serve as reasonable estimates of future returns. a year earlier, investment x had a market value of $27 comma 000; and investment y had a market value of $46 comma 000. during the year, investment x generated cash flow of $2 comma 025 and investment y generated cash flow of $ 6 comma 770. the current market values of investments x and y are $28 comma 582 and $46 comma 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?