Consider the following three bond quotes; a Treasury note quoted at 87.25, and a corporate bond quoted at 102.42, and a municipal bond quoted at 101.45. 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?
A) $872.50, $1,000, $1,000, respectively
B) $1,000, $1,000, $1,000, respectively
C) $872.50, $1,024.20, $5,072.50, respectively
D) $1,000, $1,024.20, $1,001.45, respectively

Question

Quizplus · Accepted Answer

The price of bonds is calculated by multiplying the quote by the par value. For the Treasury note quoted at 87.25, the price is 87.25% of $1,000, which equals $872.50. For the corporate bond quoted at 102.42, the price is 102.42% of $1,000, which equals $1,024.20. For the municipal bond quoted at 101.45, the price is 101.45% of $5,000, which equals $5,072.50.

Consider the Following Three Bond Quotes; a Treasury Note Quoted