Investment required for a bond/stock purchase: How much cash is required to purchase $125,000 nominal of 8% stock at a market price of 92 (i.e., $92 per $100 nominal)?

Introduction / Context:
Quoted prices for fixed-interest stock are typically per $100 nominal. To find the cash outlay for a desired nominal amount, scale the quoted price accordingly. The coupon rate is irrelevant to the cash needed for the purchase.

Given Data / Assumptions:

• Nominal (par) to be purchased = $125,000.
• Quoted price = 92 per $100 nominal.

Concept / Approach:
Investment = Nominal * (Quoted price / 100). Multiply the nominal target by 0.92 to get the total cash outlay, ignoring brokerage and taxes (not mentioned).

Step-by-Step Solution:

Verification / Alternative check:
Each $100 nominal costs $92; for 1,250 hundreds, pay 1,250 * $92 = $115,000.

Why Other Options Are Wrong:
$120,000, $105,000, and $118,000 do not match 92% of $125,000; $125,000 is the cost at par, not at 92.

Common Pitfalls:
Treating 92 as 0.92 dollars instead of 92 per hundred, or mixing nominal and cash amounts.

Final Answer:
$ 115000