True or False
Give a 5 sentence explanation as to why it is true or false.
The price an investor will pay to purchases a Fannie Mae Issues that will mature on March 2013 is $1,043.4375. The bid quote for this Fannie Mae Issue is 104:09 and asked quote of 104:11. The numbers behind semi-colon is quoted as 32nd.
TRUE
Bond quotation is the last price at with the bond is traded, generally it is expressed as percentage of par value which is usually $1000. bonds are expressed in 32nds.In the given case the bid quote 104:09 can be expressed as 104+9/32 % it means 104.28% (as 9/32 = .28) it means the bid price of a bond is $1042.8(1000*104.28/100). the similar calculation for ask quote also. 104:11 can be expressed as 104+11/32% it means 104.34% (as 11/32 =.34) It means the ask price is $1043.4
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