What is the value of the mortgage after the payment

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1. You have $500,000 available to invest. The risk-free rate, as well as your borrowing rate, is 8%. The return on the risky portfolio is 16%. If you wish to earn a 22% return, you should ____.

a. invest $125,000 in the risk-free asset.

b. invest $375,000 in the risk-free asset

c. borrow $125,000

d. borrow $375,000

e. none of the above

2. John House has taken a 20-year, $250,000 mortgage on his house at an interest rate of 6% per year. What is the value of the mortgage after the payment of the fifth annual installment?

 

Reference no: EM131973697

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