Bond Fair Value Facts: Durango Corp. just purchased a $1,000,000 par value municipal bond issued by San Marcos, TX Electric Utility as a temporary investment. This bond has a term of 4 years and a Bond Rating of A. Purgatory uses the broker, Blues Brothers LLP to value these investments. Blues has assembled the following matrix of bond price data for actively traded municipal bonds. Bond Prices (% of par) Bond Ratings Term in years AAA AA BBB 3 103.80 103.20 101.27 5 102.58 102.40 99.61 I There is not a publicly traded bond with exactly the same characteristics as the San Marcos municipal bond - 4 year-term, and an A bond rating. There are however traded bonds that are somewhat similar bonds with 3 and 5-year terms and bonds rated AA and BBB. Fair Value: FVH Level