Prob sset 5.2

3. (5 points) An investor purchases a $10,000 face value T-Bond today that matures 12.40 years from now. The coupon rate is 6.25% and the investor buys the bond 110 days after the last coupon payment, with 70 days until the next payment. The current market interest rate is 6.80%. Assume semi-annual interest payments.

a. Calculate the price of the bond in dollars.

b. Quote the bond price as a percent (%) of face value.

c. Calculate the accrued interest as a percentage and as a dollar amount.

d. Calculate the dirty price of the bond as a percent of face value (includes accrued interest).

e. Quote the dirty price of the bond in dollars (includes accrued interest).