Buying Bonds Answers

A bond is a small, interest-bearing loan made by an individual to a corporate or government entity.

Eva follows the bond market and often purchases bonds issued by Sanden Research Labs. Last year, she purchased three such bonds in January, one in May, and four in June, then sold them all in November. Sanden Research Labs bonds were selling at 78.430 in January, 95.652 in May, 86.220 in June, and 87.454 in November. If each bond she purchased had a par value of $500, how much profit did Eva gain from buying and selling these bonds?a.$23.81b.$238.10c.$20.60d.$119.05

Bonds worth $1,000 issued by the Dowc Beverage Co. are selling at 91.760. How much would you have to pay for seven such bonds?a.$764.23b.$7,642.32c.$7,000.00d.$6,423.20

Bonds from the U.S. Treasury are selling at 102.293, bonds from Alachua County are selling at 85.681, and bonds from the city of Northfield are selling at 94.442. How much will it cost Lana if she wants to purchase one bond with a par value of $1,000 from each of these sources? a.$3,000.00b.$3,282.41c.$2,824.16d.$328.24

Which of the following forms of bonds has the least risk?a.Municipal Bondsb.Below-Investment Grade Bondsc.Corporate Bondsd.Treasury Bonds

Diana is trying to choose a broker who will help her purchase a par value $1,000 corporate bond from Deegan Pharmaceuticals. Broker P charges a commission of 4.4% of the market value of each bond purchased, and Broker Q charges a flat fee of $32.50 for each bond purchased. If bonds from Deegan Pharmaceuticals are selling at 104.682, which broker will give Diana the better deal, and by how much?a.Broker P’s commission will be $9.47 less than Broker Q’s.b.Broker P’s commission will be $27.89 less than Broker Q’s.c.Broker Q’s commission will be $13.56 less than Broker P’s.d.Broker Q’s commission will be $11.50 less than Broker P’s.

Escambia County $1,000 bonds are selling at 109.443. What is the market price of one such bond? a. $1,109.44 b. $1,000.00 c. $109.44 d. $1,094.43 Please select the best answer from the choices provided

Corporate bonds from Agram Imports are selling at 80.191, bonds from Rayje Clothiers are selling at 115.550, and bonds from Orlon Jewelry are selling at 91.931. If each of these bonds has a par value of $1,000, and Maud wishes to purchase three bonds from Agram Imports, two bonds from Rayje Clothiers, and one bond from Orlon Jewelry, how much can she expect to pay in total?a.$6,470.88b.$8,630.16c.$5,636.04d.$6,000.00

Sylvia is considering investing in one of two bond packages offered to her by different brokers.Broker U suggests that Sylvia buy two par value $1,000 bonds from Franklin County, three par value $500 bonds from Enam Telecom, and two par value $1,000 bonds from the city of Iligs.. Franklin County bonds are selling at 96.674, Enam Telecom bonds are selling at 109.330, and Iligs bonds are selling at 103.851. Broker V suggests that Sylvia buy four par value $500 bonds from Trochel Office Supplies, one par value $500 bond from Okaloosa county, and three par value $1,000 bonds from Globin Publishing. Bonds from Trochel Office Supplies are selling at 105.142, Okaloosa county bonds are selling at 85.990, and Globin Publishing bonds are selling at 97.063. If Broker U charges a commission of 2.8% of the market value of the bonds sold and Broker V charges a fee of $65 for each bond sold, which bond package will cost Sylvia less, and by how much?a.Broker V’s bond package will cost Sylvia $366.00 less than Broker U’s.b.Broker V’s bond package will cost Sylvia $205.77 less than Broker U’s.c.Broker U’s bond package will cost Sylvia $156.02 less than Broker V’s.d.Broker U’s bond package will cost Sylvia $361.79 less than Broker V’s.

Grace wishes to buy a corporate bond with a par value of $1,000 from SFT Legal. If Grace’s broker charges her a commission of 4% of the market value of each bond, and SFT Legal has a market rate of 103.563, how much commission does Grace owe her broker?a.$107.56b.$41.43c.$40.00d.$44.14