The market (or clean)price of a bond on June 15,2010 is 102.75.The accrued interest on this date is $10.27.If an investor wishes to purchase $1200 worth of this bond,what is the full (or dirty)price?

Question

Quizplus · Accepted Answer

The full (or dirty) price of a bond is the market (or clean) price plus the accrued interest. The market price given is 102.75% of the face value. For $1200 worth of bonds, the market price is $1200 * 102.75% = $1233. The accrued interest is $10.27. Therefore, the full price is $1233 + $10.27 = $1243.27.

The Market (Or Clean)price of a Bond on June 15,2010