Answer:
The multiple choices are:
$5,006.00
B $5,018.75
C $5,025.00
D $5,028.75
The correct option is B,$5018.75
Step-by-step explanation:
The key to unlock this question is to know that government securities are usually quoted in 1/32 nds ,which means that in calculating the price the number after 100 is is multiplied by 1/32.
1M means 1000,while 5M means 5000
The price of 5M=5000*(100+12*1/32)%
The price of 5M=5000*(100+0.375 )%
The price of 5M=$5018.75
In this case the bid price which is lower is used when selling securities to the dealer