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5. Assume that you have a mortgage at 6% and also have $6000 that can be used to either reduce the mortgage or

5.
  Assume
 that
 you
 have
 a
 mortgage
 at
 6%
 and
 also
 have
 $6000
 that
 can
 be
 used
 to
  either
 reduce
 the
 mortgage
 or
 to
 invest
 at
 5%.
 Should
 you
 (i)
 reduce
 your
 mortgage
 by
 $6000
  and
 borrow
 to
 invest,
 
 (ii)
 invest
 the
 $6000,
 or
 (iii)
 simply
 reduce
 the
 mortgage
 by
 $6000?

This question was asked on Jan 30, 2013.

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