A $1,000 face value,120-day bond is quoted at a bank discount yield of 3.38 percent.What is the current bond price?

Name: A $1,000 face value,120-day bond is quoted at a bank discount yield of 3.38 percent.What is the current bond price?
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Question

Quizplus · Accepted Answer

The bond price can be calculated using the bank discount yield formula: Price = Face Value * (1 - (Discount Yield * (Days to Maturity / 360))). Substituting the given values: Price = $1,000 * (1 - (0.0338 * (120 / 360))) = $988.73.

A $1,000 Face Value,120-Day Bond Is Quoted at a Bank