How is the dollar price of a bond calculated using the point method according to the chapter?

The dollar price of a bond is calculated using the point method by multiplying the number of full points by $10 and adding any additional fractions of a point, also multiplied by $10. For example, a bond quoted at 97% would be calculated as 97 full points ($970) plus 0.5 points ($5), resulting in a total price of $978.75.

To determine the dollar price of a bond using the point method, you first take the quoted percentage of the bond. Each full point represents 1% of the par value, which is typically $1,000. Therefore, for a bond quoted at a certain percentage, you multiply the full points by $10 to find the dollar amount. If there are any fractions of a point, you also multiply that fraction by $10 and add it to the total. For instance, if a bond is quoted at 97 and 3/4 percent, you would calculate it as 97 full points ($970) plus 3/4 of a point ($7.50), leading to a total of $978.75.