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Consider the following bond: Bond issued on 1/1/2010; 20-year maturity, face value $1000, coupon rate 8%, semi-annual coupons; Bond transacted on 9/1/2015 at a bond

Consider the following bond:

Bond issued on 1/1/2010; 20-year maturity, face value $1000, coupon rate 8%, semi-annual coupons; Bond transacted on 9/1/2015 at a bond market rate of 10%; Use 30/360 day count convention.

a) Draw a timeline of the bond's cash flow and label it with the following dates: issued, previous coupon [P], transaction, next coupon [N], maturity.

Issued Date ($$?) -------- Previous Coupon ($$?) ---------Transacted Date ($$?) ------------ Next Coupon ($$?) --------- Maturity Date ($$?)

b) Calculate Accrued Interest

c) Calculate the Dirty [Full] Price of this bond.

d) Calculate the Clean [Flat] Price of this bond.

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