### CFA Practice Question

You see a quote of 99:46 for a government bond in the newspaper. The price of the bond is ______.
A. 99.46% of par
B. 100.44% of par
C. Neither of the above answers
Explanation: The printed price is actually an error. Government bond prices are quoted in thirty-seconds of a point; hence, you should never see a number larger than 31 after the colon in a quoted price. The referenced quote of 99:46 is equivalent to a quote of 100:14, and 100 14/32 = 100.44.

User Comment
gruszewski What a question! I hope I understand explanation 99 + 46/32 = 100+14/32 = 100,44% of par.
timspear Checked the Wall Street Journal and they write 99 + 12/32 as 99:12, not as 99.12.
german well at least nobody forgets this question and the convention!
nsmwaura Looks like a bootleg question... but I guess it hammers the point home
Hope02 Well, Well, Well... Somebody get me some water!
PRICHARD dont be angry hope02, i think many of us were trapped by this question
vikram59 wow! the really know how to anger someone
chamad Thanks gruszewski: Your undestanding helped me to better understand the question.
ml42085 I thought I forgot everything when I read this question...
aravinda Frankly speaking I was wrong on this as well...
Looking at the explanation...here is what I(I think) they are talking about....

The governament bond prices are ALWAYS quoted as 32 seconds of a point. That is if the quote price is say, 95:32 >> 99* 1/32 and similarly, if the quote is 99:32, the price is 99*1/32..

But in this question...it is quoted at 99:42 and which is 14 seconds more than 32. So actually this quote is an error where as the correct one should be 100:14

Well, I think I can only remember it this way... appreciate any other comments
Shalva I was also wrong...

But I'll never forget this point in future.
SuperKnight Aravinda, i think you have it wrong. Here is how it works, 99:42 means.. 99 + 42/32 .. anything after the ":" is the numerator to the fraction over 32.. x/32, in this case 42/32.. so 99:32 would be 99 + 32/32, or 100, not 99 + 1/32... and 100:14 would be 100 + 14/32.. or 99.4375 % of par..
apiccion Nails it in quite well. Like a nail-gun to the head.
dmfcrowe Printed price is an error... hence C is what I thought. Actually did work out that it was equal to 100.44 but thought it was too rediculous.
pstebelp Lol
Kashi2010 So much for no trick questions..!
kutch well done gruszewski
erinelize Are you serious?
Insipidity Wow ... just wow.
RAustin WOW!!
Downgrade no bond would ever be quoted w the the 32'nds adding up higher than a point.
It would be 100:12....
Ifi2703 46/32 = 1.4375
99 + 1.4375 = 100.4375