A bond with a par value of \( \$ 5,000 \) is quoted at 102.088 . What is the dollar price of the bond? a. \( \$ 5,075.23 \) b. \( \$ 5,104.40 \) c. \( \$ 5,138.43 \) od. \( \$ 4,814.95 \) e. \( \$ 5,055.79 \)

To calculate the dollar price of the bond, you take the quoted price, which is 102.088, and multiply it by the par value of the bond, which is \( \$ 5,000 \). Then divide by 100 to convert the quote to a dollar amount: \[ \text{Dollar Price} = \left(\frac{102.088}{100}\right) \times 5,000 = 5,104.40 \] So the dollar price of the bond is \( \$ 5,104.40 \), making option b the correct answer! Bonds have a rich historical context—dating back to the Roman Empire, where they were initially used to fund wars and major public projects. Fast forward to today, bonds are a critical part of the financial landscape, allowing governments and corporations to borrow money while providing investors with a relatively stable income stream. When buying bonds, investors often overlook the impact of interest rates on bond prices. A common mistake is assuming that all bonds behave similarly; however, factors such as maturity, credit quality, and market conditions can significantly influence price fluctuations. Keep these points in mind to navigate the bond market more effectively!