8
QuizMultiple Choice

Buying Bonds

Question 8 • Financial Math A

Pierce wishes to purchase a municipal bond with a par value of $500 from Chattahoochee County, and he is trying to decide which broker he should employ to purchase the bond. Broker A charges a 3.1% commission on the market value of each bond sold. Broker B charges a flat $24 for each bond sold. If the bond has a market rate of 88.754, which broker will give Pierce the better deal, and by how much?a.Broker B’s commission will be $9.75 less than Broker A’s.b.Broker B’s commission will be $3.51 less than Broker A’s.c.Broker A’s commission will be $13.76 less than Broker B’s.d.Broker A’s commission will be $10.24 less than Broker B’s.

Answer
A
A
B
B
C
C
D
D
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Pierce wishes to purchase a municipal bond with…