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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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