Problem:
Consider the following three bond quotes: a Treasury note quoted at 102:30, a corporate bond quoted at 99.45, and a municipal bond quoted at 102.45.
Required:
Question: If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars?
- $1000, $1000, $5000, respectively
- $1002.30, $994.50, $5012.25 respectively
- $1029.38, $994.50, $5122.50, respectively
- $1002.30, $1000, $1000, respectively
Note: Provide support for rationale.