Question
On Monday February 20, 2023 you purchase a $1,000 Treasury bond that matures on May 15, 2031 (settlement occurs one day after purchase, so you
On Monday February 20, 2023 you purchase a $1,000 Treasury bond that matures on May 15, 2031 (settlement occurs one day after purchase, so you receive actual ownership of the bond on Tuesday February 21, 2023). The coupon rate is 4.375 percent and the current price quoted on the bond is 100.327 percent of par (in dollar terms, $1,003.27). The last coupon payment occurred on November 15, 2022, and the next coupon payment will be paid on May 15, 2023. Calculate the accrued interest due to the seller from the buyer at settlement.
Hint: do NOT round your intermediate steps
Answer is NOT: 26.99!!
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