Ch. 7- Homework Problems Saved Help Save & Exit Sbmit 10 Check my work 2 Conside

Question

Ch. 7- Homework Problems Saved Help Save & Exit Sbmit 10 Check my work 2 Consider the following three bond quotes: a Treasury note quoted at 98.25, a corporate bond quoted at 103.20, and a municipal bond quoted at 101.85. 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? (Do not round intermediate calculations and round your final answers to 2 decimal places.) 2 points Skipped Treasury bond eBook Municipal bond Hint Print References

Explanation / Answer

The treasury bond is quoted at $98.25, the par value is $1000,

so the price of the bond is = $982.5 (98.25% &1000)

the corporate bond is trading at 103.20 % of the oar value,

so the price of the bond is $1032.

The munipical bond is trading at 101.85,

so, the price of the bond is (101.85% * 5000) = $5092.5

NOTE :PAR VALUE IS GENERALLY SET AT 100, REPRESENTING 100% OF BONDS FACE VALUE

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---