Question
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
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 rd=12%? Explain your answer
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The Handbook Of Financial Instruments
Authors: Frank J. Fabozzi
1st Edition
0471220922, 978-0471220923
