A bond quote of 82.25 in dollars is equal to
A. $8.25.
B. $82.25.
C. $822.50.
D. $8,025.50.
B?
To determine which option the bond quote of 82.25 in dollars is equal to, let's analyze the decimal places.
Typically, bond quotes are expressed as a percentage of the bond's face value. In this case, the bond quote is 82.25, but it does not include any symbols or annotations to indicate that it represents a percentage. Therefore, we can assume that the bond quote of 82.25 represents 82.25% of the bond's face value.
To convert a percentage to a decimal, we divide it by 100. So, we divide 82.25 by 100:
82.25 / 100 = 0.8225
The resulting decimal is 0.8225, which indicates that the bond is quoted at 82.25% of its face value. Now, we need to determine the face value of the bond.
To calculate the face value, we need to divide the bond quote amount by the quoted percentage:
Face value = Bond quote amount / Quoted percentage
Face value = 82.25 / 0.8225
Using a calculator, we can perform the division:
Face value = 100
The face value of the bond is 100.
Now that we know the face value of the bond, we can determine the answer to the question.
Option B states that the bond quote of 82.25 in dollars is equal to $82.25. To verify this, we compare the bond quote with the face value in dollars:
$82.25 / $100 = 0.8225
As the calculation shows, $82.25 is 82.25% of $100, which matches the bond quote.
Therefore, the correct answer is B. $82.25.