Consider the Following Three Bond Quotes; a Treasury Note Quoted

question 94

Multiple Choice

Consider the following three bond quotes; a Treasury note quoted at 102.30, and a corporate bond quoted at 99.45, and a municipal bond quoted at 102.45. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars?

• A) $1,002.30, $1,000, $1,000, respectively
• B) $1,000, $1,000, $5,000, respectively
• C) $1,002.30, $994.50, $5,012.25 respectively
• D) $1,023.00, $994.50, $5,122.50, respectively

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Definitions:

Face Value

The nominal or dollar value printed on a bond, note, or other financial instrument, representing the amount due at maturity.

Journal Entries

Are the record of all transactions a company makes, detailed by date, in the accounting system.

Secured Bond

Bond issued by a corporation that pledges specific assets as security to meet the terms of the bond agreement.

Debenture Bond

A type of debt instrument not secured by physical assets or collateral but based on the issuer's creditworthiness and reputation.