Consider the following three bond quotes: a Treasury bond quoted at 103:29, a co
ID: 2641157 • Letter: C
Question
Consider the following three bond quotes: a Treasury bond quoted at 103:29, a corporate bond quoted at 96.30, and a municipal bond quoted at 100.70. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars?
Consider the following three bond quotes: a Treasury bond quoted at 103:29, a corporate bond quoted at 96.30, and a municipal bond quoted at 100.70. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars?
Explanation / Answer
The quoted price is shown as a percentage price of the par value.
1) Price of Treasury note in dollars: [103.29 / 100] * $1,000 = $1,032.90
2) Price of corporate bond in dollars: [96.30 / 100] * $1,000 = $963
3) Price of municipal bond in dollars: [100.70 / 100] * $5,000 = $5,035
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