By how much did the price of a $1,000 par-value bond increase if The Wall Street Journal shows a change of +6 from the previous day?
A) $0.600
B) $1.875
C) $6.000
D) $18.75

Question

Quizplus · Accepted Answer

The +6 change represents a 0.6% increase (6/1000). Therefore, the price of the bond increased by 0.6% of $1,000, which is $6. However, since the answer choices are in dollar amounts rather than percentages, we need to divide $6 by 3 (the bond has a 3% coupon rate), which gives us $1.875. Therefore, the price of the bond increased by $1.875.

By How Much Did the Price of a $1,000 Par-Value