A $900 bond,redeemable for $950,is bought on July 23,2010 at a market quotation of q = 101.35.The accrued interest is $29.58.What is the full price of the bond?

Question

Quizplus · Accepted Answer

First, we need to calculate the clean price, which is the price of the bond without accrued interest:

$900 x 1.0135 = $914.15

Then, we add the accrued interest:

$914.15 + $29.58 = $943.73

However, the bond is redeemable for $950, so we need to adjust the full price to reflect this:

$943.73 + $950 - $900 = $994.73

Therefore, the best choice is (C) $941.73, which is the closest to the calculated full price of $994.73.

A $900 Bond,redeemable for $950,is Bought on July 23,2010 at a Market