Question

Consider a t bond with a 6% semiannual yield and a clean price of $1100. number of days since last coupon: 40 days number of days in the coupon period: 184 days calculate the bond dirty price.

Answer 1

The bond dirty price is $ 1,107.61.

Dirty price:

• A bond's cost, which takes accumulated interest based on the coupon rate into account, is referred to as the "dirty price" in a bond pricing quote. Quotes for bonds between coupon payment periods include the interest that has accumulated as of the quote date. Simply put, a clean bond price excludes accumulated interest, but a dirty bond price does.
• A coupon bond's clean price is its face value minus any accumulated interest. In other words, it excludes the interest that accumulated between coupon payments. On financial news websites, the listed price is often the clean price. The term "dirty price" refers to the bond's price after collected interest between coupon payments.

Clean price = Quoted Price=$ 1,100

Accrued interest =$\quad 1000^{*} 7 \% * 1 / 2^{*} 40 / 184$ = 7.61

Dirty price =clean price  + accrued interest = 1100+7.61= $ 1,107.61

Learn more about dirty price here brainly.com/question/15518377

#SPJ4