Yeild to maturity, YEILD TO MATURITY: Harrimon Industries

Yeild to maturity

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Reference no: EM131303344

YEILD TO MATURITY: Harrimon Industries bonds have 6 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 10%.

a. What is the yield to maturity at a current market price of (1) $865 and (2) $1,166?

b. Would you pay $865 for each bond if you thought that a “fair” market interest rate for such bonds was 12%--that is, if r (4) =12%? Explain your answer.

Reference no: EM131303344

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Yeild to maturity : YEILD TO MATURITY: Harrimon Industries bonds have 6 years left to maturity. Interest is paid annually, and the bonds have a $1,000 par value and a coupon rate of 10%. What is the yield to maturity at a current market price of (1) $865 and (2) $1,166?

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