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**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.

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**User Contributed Comments**
24

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 Which is the right answer! |

praj24 |
Lol this question pretty much summed up my first mock... long way to go! |

will080912 |
I didn´t even select an answer, just skip the question |