A $10,000 bond quoted at 103½% is selling for $10,350. The answer to your question is C. In order to find the answer, you must first convert the percentage (103½%) to a decimal. This also requires you to change the fraction (½) to a decimal. In this case, 103½% converts to 1.035. Then, multiply 1.035 x $10,000 to find your answer. Once you complete these calculations, you will find that the answer is $10,350.

A common mistake in calculating the answer to this question would be to misplace the decimal and calculate the percentage as .1035. Alternatively, one could fail to change the ½ percent correctly, or simply make a calculation error. Making these mistakes might lead you to select the distractor choices (A, B, or D).