The amount premium on bond selling is $83.75. Option A is correct.
Given that,
Exxon sells its bonds at 108.375%. The amount of premium or discount the bond is selling for is to be determined.
What is simplification?
The process in mathematics to operate and interpret the function to make the function or expression simple or more understandable is called simplifying and the process is called simplification.
Face value of bonds = $1000
The selling price of bond = 1000 × 108.375%
=$1083.75
Premium on bonds = difference in the selling price - value of a bond
= 1083.75-1000
= $83.75.
Thus, the amount of the premium on bond selling is $83.75. Option A is correct.
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