36
QuizMultiple Choice

Topic Test

Question 36 • LVA - Mathematical Modeling - Spring

You purchase six municipal bonds on the first of the year. The current market value price is 103. The commission charge is $5 per bond. What is the cost of the purchasing these bonds?

Answer
A
$6210
B
$633
C
$648
D
$3090

Explanation

A bond quoted at 103 costs 103% of its $1,000 face value, or $1,030. Six bonds cost 6 × $1,030 = $6,180, and the commissions add 6 × $5 = $30. The total purchase cost is $6,210, choice A.

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