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Options
- A
Investment Y, because it has a higher absolute return
- B
Investment X, because it can be exited after just one year
- C
Investment Y, because it has a higher holding period
-
Investment X, because it has a higher annualized return
Correct answer
Why this is the answer
Annualized return considers the effect of time. X’s 10% in one year is higher than Y’s equivalent compounded annual return of ~6.66%.
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