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The price quotations of Treasury bonds in the Wall Street Journal show a bid price of 104.5313 and an ask price of 104.5489.
If you sell a Treasury bond, you expect to receive _________.

a) $1,045.00 b) $1,045.31 c) $1,045.48 d) $1,000.00

Respuesta :

Answer:

b) $1,045.31

Explanation:

The computation of the receiving amount is shown below:

Amount = Bid price × par value

where,

We assume the par value is $1,000

So, the amount equal to

= 104.5313 × $1,000

= $1,045.31

The bid price is the price at which the bank is purchased the financial security from the investor. Here the selling price is for the investor and the buying price is for the buyer