5. Problem 7.09 Click here to read the eBook: Bond Yields Click here to read the eBook: Bonds...

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5.  Problem 7.09
Click here to read the eBook: Bond Yields
Click here to read the eBook: Bonds with Semiannual Coupons
YIELD TO MATURITY
Harrimon Industries bonds have 4 years left to maturity.Interest is paid annually, and the bonds have a $1,000 par valueand a coupon rate of 8%.
What is the yield to maturity at a current market priceof
$836? Round your answer to two decimal places.
   %
$1,070? Round your answer to two decimal places.
   %
Would you pay $836 for each bond if you thought that a "fair"market interest rate for such bonds was 13%-that is, ifr_d = 13%?
You would buy the bond as long as the yield to maturity at thisprice equals your required rate of return.
You would not buy the bond as long as the yield to maturity atthis price is greater than your required rate of return.
You would not buy the bond as long as the yield to maturity atthis price is less than the coupon rate on the bond.
You would buy the bond as long as the yield to maturity at thisprice is greater than your required rate of return.
You would buy the bond as long as the yield to maturity at thisprice is less than your required rate of return.

-Select-IIIIIIIVVItem 3

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a1K NBond Price Annual Coupon1 YTMk Par value1 YTMNk1K 4836 See Answer

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5. Problem 7.09Click here to read the eBook: Bond YieldsClick here to read the eBook: Bonds with Semiannual CouponsYIELD TO MATURITYHarrimon Industries bonds have 4 years left to maturity.Interest is paid annually, and the bonds have a $1,000 par valueand a coupon rate of 8%.What is the yield to maturity at a current market priceof$836? Round your answer to two decimal places. %$1,070? Round your answer to two decimal places. %Would you pay $836 for each bond if you thought that a "fair"market interest rate for such bonds was 13%-that is, ifrd = 13%?You would buy the bond as long as the yield to maturity at thisprice equals your required rate of return.You would not buy the bond as long as the yield to maturity atthis price is greater than your required rate of return.You would not buy the bond as long as the yield to maturity atthis price is less than the coupon rate on the bond.You would buy the bond as long as the yield to maturity at thisprice is greater than your required rate of return.You would buy the bond as long as the yield to maturity at thisprice is less than your required rate of return.-Select-IIIIIIIVVItem 3