Question
An investor purchases the following bonds for his portfolio and the settlement dates are given for each transaction. For each bond position calculate the accrued
An investor purchases the following bonds for his portfolio and the settlement dates are given for each transaction. For each bond position calculate the accrued interest to the settlement date and the total purchase value (including accrued interest) paid by the investor to two decimal places. All bonds are semi-annual pay. Show all work, including accrued interest calculations.
(a) $10 million par value of a Nike 5.35% bond due August 15th, 2025. The investor bought the bonds in the market at a clean price of 90.00 per bond. The bond uses the 30/360 day count convention and settles on January 22, 2020.
(b) $10 million par value of BCE 5.15% bond due March 15, 2024. The investor bought the bonds in the market at a clean price of 103.60 per bond. The bond has an actual/365 day count convention and settles on January 22, 2020.
Please provide calculation on how you get the numbers.
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