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 market rate of 103.563 means the bond sells for 103.563% of its $1,000 par value: $1,000 × 1.03563 = $1,035.63. The commission is 4% of that market value, so $1,035.63 × 0.04 = $41.4252, which rounds to $41.43. The correct choice is $41.43.

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