You are buying a bond at a clean price of $1,180. The bond has a face value of $
ID: 2636509 • Letter: Y
Question
You are buying a bond at a clean price of $1,180. The bond has a face value of $1,000, a 9 percent coupon, and pays interest semiannually. The next coupon payment is 4 months from now. What is the dirty price of this bond?A) 1165.00 B) 1195.00 C) 1202.00 D) 1000.00 E) 1210.00 You are buying a bond at a clean price of $1,180. The bond has a face value of $1,000, a 9 percent coupon, and pays interest semiannually. The next coupon payment is 4 months from now. What is the dirty price of this bond?
A) 1165.00 B) 1195.00 C) 1202.00 D) 1000.00 E) 1210.00
A) 1165.00 B) 1195.00 C) 1202.00 D) 1000.00 E) 1210.00
Explanation / Answer
Ans. B 1195
Clean Price = $1180
Interest accrued is of 2 months = 1000*9%*2/12= $15
Dirty price = Clean price +Accrued Interest= $1180 +15= $1195