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A bond with face value of $500,000 has a bid quote of 99.1227 and an asked quote of 99.3996. How much will you, an investor, pay to purchase 10 of these bonds
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39 votes
39 votes
A bond with face value of $500,000 has a bid quote of 99.1227 and an asked quote of 99.3996. How much will you, an investor, pay to purchase 10 of these bonds

User Fitz
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1 Answer

17 votes
17 votes

Answer: 4969980

Step-by-step explanation:

Based on the information given in the question, the following can be deduced:

Face value = $500,000

Bid quote = 99.1227

Ask quote = 99.3996

The amount that will be paid by an investor to purchase 10 of these bonds will be:

= 10 × Face value × Ask price

= 10 × 500000 × 99.3996%

= 10 × 500000 × 0.993996

= 4969980

User Josh Fraser
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2.9k points
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