Final answer:
A bond quote of 98 for a $1000 bond means it is trading at $980 in the market.
Step-by-step explanation:
In the context of bond markets, a bond quote represents the price at which the bond trades in the market. If a $1000 bond is quoted at 98, it means that the bond is currently trading at 98% of its face value, or $980.
This is because when interest rates rise, existing bonds with lower interest rates become less attractive. To compensate for the lower interest rate, the price of the bond is reduced below its face value to make it more attractive to investors.