Your customer wants to know how much they paid for 20 bonds at 100. What would you tell them?

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Multiple Choice

Your customer wants to know how much they paid for 20 bonds at 100. What would you tell them?

When determining the total amount a customer paid for bonds priced at 100, it's important to understand the concept of bond pricing. A bond price expressed as 100 refers to 100% of its par value or face value, which is typically $1,000 for most corporate bonds. To calculate the total cost for 20 bonds priced at 100, you would use the following formula: Total Cost = Number of Bonds × Price per Bond In this case, each bond costs $1,000, so: Total Cost = 20 bonds × $1,000 per bond = $20,000. This calculation confirms that the customer paid $20,000 for 20 bonds at a price of 100. Understanding the relationship between bond pricing and par value is essential in answering such questions accurately.

When determining the total amount a customer paid for bonds priced at 100, it's important to understand the concept of bond pricing. A bond price expressed as 100 refers to 100% of its par value or face value, which is typically $1,000 for most corporate bonds.

To calculate the total cost for 20 bonds priced at 100, you would use the following formula:

Total Cost = Number of Bonds × Price per Bond

In this case, each bond costs $1,000, so:

Total Cost = 20 bonds × $1,000 per bond = $20,000.

This calculation confirms that the customer paid $20,000 for 20 bonds at a price of 100. Understanding the relationship between bond pricing and par value is essential in answering such questions accurately.

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