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Multiple choice question     A bond with a face value of $200,000 and a quoted price of...

Multiple choice question    

A bond with a face value of $200,000 and a quoted price of 102⅛ has a selling price of

A $240,225
B $204,025
C $200,225
D $204,250
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Answer #1

1/8 = 0.125

Therefore quote price corresponds to 102.125% (102+0.125).

Quote price of bonds take the past value of the bond as it's base. So when a bond is said to have a quote price of 102.125%, the selling price can be calculated by multiplying the quote price percentage with the past value of the bond, to be $204025 (200000*102.125%).

Option B $204025 is the correct answer.

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