Question
You initiated a transaction to purchase a 4.000% coupon 30-year corporate bond on Friday 8/30/2019. The maturity date of the bond is 3/25/2029 and its
You initiated a transaction to purchase a 4.000% coupon 30-year corporate bond on Friday 8/30/2019. The maturity date of the bond is 3/25/2029 and its yield to maturity is 3.654%. Please answer the following questions about this bond. (Note: you can check your work in parts (f), (g) and (h) using the BOND spreadsheet in your calculator, but I want to see the equations setup and worked through in those parts for full credit.)
(f) What is the full price of the bond on the SDT? Draw a timeline for just the current coupon period (like we did in class) and calculate the bonds full price using Method 2 in the handout, which is the method used in the text and slides).
(g) What is the accrued interest on the SDT?
(h) What is the clean price of the bond on the SDT?
All prices and interest rates must be expressed to THREE decimal places. You must show your work
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