Question

Closing bond prices for Friday, January 16th, 199X.

Bond Curr Yld Vol Net Close Chg
MMSCorp11s18 12.2 100 90 +1/2
MaxCo10s10 10 20 100 ----
STC zr05 ---- 15 45 1/2 -1/8
SamCorp9s07 cv 50 108 1/4 ----
Which bond has a closing market price equal to its par value?

a. MMSCorp11s18
b. MaxCo10s10
c. STC zr05
d. SamCorp 9s07

Answer 1

The bond MaxCo10s10 has a closing market price equal to its par value as indicated by the 'Net Close' value of '100'. The correct option is B.

Step-by-step explanation:

To determine which bond has a closing market price equal to its par value, we look at the 'Net Close' column for each bond listed in the question. The 'Net Close' represents the bond's closing market price expressed as a percentage of its par value, which is typically $1,000 for corporate bonds. A closing market price of '100' indicates that the bond is trading at its par value.

In the list provided, MaxCo10s10 has a 'Net Close' value of '100', which means it is trading at its par value. Therefore, the correct answer is:
b. MaxCo10s10