Multiple Choice
A mortgage instrument pays $1.5 million at the end of each of the next two years. An investor has an alternative investment with the same amount of risk that will pay interest at 8% compounded semiannually. Which of the following amounts is closest to what the investor should pay for the mortgage instrument?
A) $1.28 million.
B) $1.39 million.
C) $2.67 million.
D) $2.72 million.
Correct Answer:
Verified
Correct Answer:
Verified
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