Question 3 a) The ex-dividend date is the date at which the gross price of a bond decreases by the present value of the next coupon. Some Treasury bonds trade ex-dividend. During this period (seven business days between the ex-dividend date and the next coupon date for UK Gilts), the accrued interest is negative. Explain why. b) What is the price of a 5-year bond with a nominal value of $100, a yield to maturity of 7% (with annual compounding frequency), a 10% coupon rate and an annual coupon frequency? What is the price for a yield to maturity of 8%, 9% and 10%.