Answer: flat price and settled using the full price.

The correct answer is **B** because bond dealers typically quote the flat price. When a trade occurs, the accrued interest is added to the flat price to determine the full price, which is paid by the buyer and received by the seller on the settlement date. The full price is also referred to as the invoice or 'dirty' price. This process aligns with the standard practices in fixed income markets for calculating a bond's price between coupon dates.

Author: LeetQuiz Editorial Team