Question

A semi-annual coupon Corporate bond was purchased for settlement on November 12, 2017. The last coupon was paid on October 15, 2017. Using the 30/360 day count convention, answer the following questions:a. on what date will the next coupon be paid?b. how many days passed between the last coupon paid and the settlement date?c. how many days are there in the current coupon period?

Answer 1

Answer:

Explanation:

Bond is with semi annual coupon payments, pays every 6 month

a) Last coupon was paid on October 15, 2017. Next coupon will be paid six months(180 days) after October 15.

So the next coupon is paid on October 15, 2017 + 6 month = April 15, 2018  

b) Settlement date is November 12, 2017  

Last coupon payment date is October 15, 2017

The number of days passed between settlement date and last coupon date = Settlement date - last coupon payment date

= November 12, 2017 - October 15, 2017 = 27 days

c) Days in current coupon period = Next coupon payment date - settlement date

Next coupon payment date = April 15, 2018

Days in current coupon period = April 15, 2018 - November 12, 2017 = 153 days