Question

If 100,000 bonds are bought at 80% of their Face Value, you must deposit the greater of ______% of Face Value or 20% of the Market Value.

A) 80%
B) 20%
C) 100%
D) 60%

Answer 1

To find the greater value, compare 100% of the face value with 20% of the market value of the bond.

Step-by-step explanation:

In this situation, we need to calculate the greater value between a certain percentage of the bond's face value and 20% of the bond's market value.

If 100,000 bonds are bought at 80% of their face value, the market value of each bond would be 80% of the face value.

Therefore, to find the greater value, we need to compare 100% of the face value (100% * face value) with 20% of the market value (20% * market value).

So, the answer is option C) 100%.