Question
a) $200,000 U.S. Treasury 7 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar price of 105-20 (this
a) $200,000 U.S. Treasury 7 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar price of 105-20 (this is the clean price) with a yield to maturity of 7.083% with the bond originally being issued at 11/15/1977. Face value per unit is $1,000.
i) Calculate the clean price of the bond issue
ii) Calculate the accrued interest of the bond issue
iii) Calculate the full price of the bond issue
b) $200,000 U.S. Treasury 7 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar price (clean price) with a yield to maturity of 7.083% with the bond originally being issued at 11/15/1977. Calculate the full price (per unit of the bond). Note: On a per unit basis, the answers to(a)and(b)should be the same.Anydifferencemustbe due to rounding error only.
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