1. 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
2. In a competitive market, the market demand is Qd = 150 - 2P and the market supply is Qs = 30 +4P. A price ceiling of $16 will result in a
shortage of 24 units
shortage of 34 units
surplus of 58 units
surplus of 34 units
Please show work.