Question 7 (6 points) An investor is considering the purchase of a new mortgage contract with the following characteristics: Face Value $1,115,000 Interest Rate j2 = 4% Amortization 25 years Term 3 years Monthly payments, rounded up to the next higher dollar (a) What is the maximum the investor would pay for the mortgage if the investor requires a yield of j12 = 5.5%? (4 Marks) (b) If the investor purchases this mortgage for $1,000,000 but sells it for $950,000 just after receiving the 12th monthly payment, what is the investor's yield, expressed as an effective annual rate? (2 Marks)