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) £1,386,834
B) £1,388,889
C) £2,674,897
D) £2,669,041
E) £3,854,512
Correct Answer:
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