Consider a corporate bond with a $1,000 face value,10% coupon with semiannual coupon payments,5 years until maturity,and which currently is selling for (has a cash price of)$1,113.80.The next coupon payment will be made in 63 days and there are 182 days in the current coupon period.The clean price for this bond is closest to:
A) $1,146.50
B) $1,065.70
C) $1,113.80
D) $1,081.10

Question

Quizplus · Accepted Answer

D) Clean price = Dirty price - accrued interest
Accrued Interest = coupon × (days since last payment/days in current coupon period)
= 50 × ((182 - 63) / 182) = 32.69
So, clean price = $1,113.80 - 32.69 = 1,081.11

Consider a Corporate Bond with a $1,000 Face Value,10% Coupon