The bond package that will cost Sylvia less will be C. broker U's package costs $156.02 less money than broker V's package.
Broker U: 2.8% commission
2 par value bonds $1,000 x 96.674% = $1,933.48
3 par value bond $500 x 109.330% = $1,639.95
2 par value bonds $1,000 x 103.851% = $2,077.02
Silvia's total investment:
= ($1,933.48 + $1,639.95 + $2,077.02) x 1.028
= $5,808.66
Broker V: $65 per bond plus
4 par value bonds $500 x 105.142% = $2,102.84
1 par value bond $500 x 85.990% = $429.95
3 par value bonds $1,000 x 97.063% = $2,911.89
Silvia's total investment will be:
= $2,102.84 + $429.95 + $2,911.89 + (8 x $65)
= $5,964.68
Broker V's offer - broker U's offer:
= $5,964.68 - $5,808.66
= $156.02
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