To determine the dollar equivalent of a bond quote, you need to understand that bond quotes are typically given as a percentage of the bond's face value. For most bonds, the face value is commonly [tex]$100.
Here's the step-by-step solution:
1. Understanding the Bond Quote: The bond quote provided is 82.25. This means the bond is quoted at 82.25% of its face value.
2. Face Value Calculation: The face value of the bond is assumed to be $[/tex]100, as this is standard for most bonds.
3. Calculating the Dollar Amount:
- Convert the percentage quote to a decimal by dividing by 100.
- Multiply this decimal by the face value of the bond.
4. Step-by-Step Math:
- Convert 82.25% to a decimal: [tex]\( 82.25 / 100 = 0.8225 \)[/tex].
- Multiply this decimal by the bond's face value: [tex]\( 0.8225 \times \$100 = \$82.25 \)[/tex].
Therefore, the bond quote of 82.25 in dollars is equal to [tex]$82.25.
The correct answer is A. $[/tex]82.25.
