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Consider a 4 and 3/8 bond, maturing 6/30/05 (the coupon payment is made every 6/30 and 12/31), trading at 98:16 for settlement 10/15/04. If the

Consider a 4 and 3/8 bond, maturing 6/30/05 (the coupon payment is made every 6/30 and 12/31), trading at 98:16 for settlement 10/15/04. If the face value of this bond is 100,000, what is the accrued interest? (There are 184 days between 6/30 and 12/31, 107 days between 6/30 and 10/15, and 77 days between 10/15 and 12/31).

A.

2,187.5 x 77/107

B.

2,187.5 x 77/184

C.

100,000 x 77/184

D.

2,187.5 x 107/184

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