You are buying a bond at a clean price of $1,180. The bond has a face value of $

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

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