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On September 1, 2012, an investor purchases a $10,000 par T-bond that matures in 12 years. The coupon rate is 6 percent and the investor buys the bond 70 days after the last coupon payment (110 days before
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On September 1, 2012, an investor purchases a $10,000 par T-bond that matures in 12 years. The coupon rate is 6 percent and the investor buys the bond 70 days after the last coupon payment (110 days before the next). The ask yield is 7 percent. The dirty price of the bond is ___.

User Taison Morris
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1 Answer

1 vote

Answer:

$9,313.75

Step by Step Explanation:

$300 x PVIFA (3.5%, 24) + 10,000 x PVIF (3.5%, 24)

= $9,197.08

$300*(70/180)

= $116.67

$9,197.08 + $116.67 = $9,313.75

Therefore the dirty price of the bond is: $9,313.75

User Donato Perconti
by
3.6k points
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