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pls 1. Accrued Interest: - Picture two identical bonds, one from the government and the other from a corporation, each with a face value of
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1. Accrued Interest: - Picture two identical bonds, one from the government and the other from a corporation, each with a face value of $1,000. - They both pay 4% in interest twice a year (on May 15 and November 15). - The government bond counts the actual number of days between interest payments (actual/actual), while the corporate bond assumes 30 days in a month and 360 days in a year (30/360). - We want to find out how much interest has accrued for both bonds by June 27, 2024 . - We want to find out how much interest has accrued for both bonds by June 27, 2024. 2. Flat Price Calculation for Corporate Bond: - Now, for the corporate bond that matures on November 15, 2024. - If you want to buy this bond with a 5% return (yield) in mind, we need to calculate its flat price. In simple terms, this is the price you'd pay for the bond, considering the interest it pays and the yield you want Step by Step Solution
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