To solve these questions, let's address each part step by step. The given information is as follows:

• Par value (Face value of the bond) = $1,000
• Coupon rate = 7.100% annually
• Maturity date = May 15, 2027
• Current price quote = 105.456
• Yield to Maturity (YTM) = 5.712%

Part a: Dollar Price of the Bond

The bond's dollar price is determined by its price quote. Price quotes for bonds are expressed as a percentage of the bond's par value. So, if the price quote is 105.456, the bond is selling for 105.456% of its par value.

The dollar price of the bond can be calculated as: $\text{Dollar Price} = \left(\frac{\text{Price Quote}}{100}\right) \times \text{Par Value}$ Substituting the values: $\text{Dollar Price} = \left(\frac{105.456}{100}\right) \times 1,000$ Let me calculate that.The dollar price of the bond is $1,054.56.

Do you have any questions so far or would you like to proceed with the next part?

Here are some related questions:

1. How does a bond's price relate to its par value?
2. Why might a bond trade above its par value?
3. What factors affect a bond's yield to maturity?
4. How is the coupon rate different from the current yield?
5. What happens to bond prices as the maturity date approaches?

Tip: Bonds with a price quote above 100 are selling at a premium, while those below 100 are at a discount.