YIELD TO MATURITY Harrimon Industries bonds have 4 years left to maturity. Interest is paid annually, and...

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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
$812? Round your answer to two decimal places.
%
$1,066? Round your answer to two decimal places.
%
Would you pay $812 for each bond if you thought that a "fair"market interest rate for such bonds was 14%-that is, ifr_d = 14%?
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.
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.

Answer & Explanation Solved by verified expert

4.0 Ratings (613 Votes)

1 14522609b I You would buy the bond See Answer

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YIELD 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$812? Round your answer to two decimal places. %$1,066? Round your answer to two decimal places. %Would you pay $812 for each bond if you thought that a "fair"market interest rate for such bonds was 14%-that is, ifrd = 14%?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.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.