14: Asset Valuation: Debt Investments: Basic Concepts

D. A homeowner has an 8.00% fixed rate mortgage. Rates on similar term mortgages are now at 7.00%. D. The homeowner is likely to exercise his option to refinance the loan with a new loan at a lower interest rate. Fahr, Inc., is not likely to redeem existing debt with a new issue at a higher rate. ................
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