Question 1: Calculate the Accrued Interest on Bonds -- please use the slide 6 - 14.and 15 as reference

Suppose you invest a 4.5% coupon $1,000 par T-bond 70 days after the last coupon payment. Settlement occurs in four days. You become the owner 74 days (70+4), and there are 110 days remaining until the next coupon payment . The bond's clear price quote is 119.20. What is the full or dirty price or iinvoice price?

Question 2 -- Calculate the corporate yield and muni bond rate (please refer slide 6-19)

For a 35% tax bracket, what is the equivalent after tax rate of a 5.25% corporate yield?

For a 35% tax bracelet. What corporate taxable yield is equivalent to a 5.75% muni bond rate?

Accrued Interest on Bonds Accrued interest on T-notes and T-bonds is calculated as INT Actual number of days since last coupon payment Actual number of days in coupon period Accrued interest = The full (or dirty) price of a T-note or T-bond is the sum of the clean price (V,) and the accrued interest 6-14