Calculate the dirty price of the transaction

Assignment Help Finance Basics

Reference no: EM132020001

Question: On October 5, 2015, you purchase a $11,000 T-note that matures on August 15, 2027 (settlement occurs two days after purchase, so you receive actual ownership of the bond on October 7, 2015). The coupon rate on the T-note is 4.391 percent and the current price quoted on the bond is 105.75 percent. The last coupon payment occurred on May 15, 2015 (145 days before settlement), and the next coupon payment will be paid on November 15, 2015 (39 days from settlement).

a. Calculate the accrued interest due to the seller from the buyer at settlement. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Accrued interest due $

b. Calculate the dirty price of this transaction. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Dirty price $

Reference no: EM132020001

Questions Cloud

Discuss about the consensus in the capital market : In October 2013, there is a consensus in the capital market that the annual inflation rate is likely to be 3.5% in US and -1.5% in China for the next two years.

Evaluate the firm stock price usign given data : Ocean Holding Corp.'s expected year-end dividend (D_1) is $4.00, and its required return is 11%. The company's dividend yield is 5.5%.

What is the most you would invest today : You are offered an investment that will pay you $800, $1200, $1500, $1700, $2000, $2500, $3000, and $3500 over the next eight years (one cash payment per year).

What is the firm degree of operating leverage : What is the firm's degree of operating leverage (defined as the ratio of the percent change in EBIT to the percent change in sales) in going from a recession.

Calculate the dirty price of the transaction : On October 5, 2015, you purchase a $11,000 T-note that matures on August 15, 2027 (settlement occurs two days after purchase, so you receive actual ownership.

How much do you have to pay : You obtain the following quotes from a dealer for a 10-year Treasury bond: If you want to buy this T-bill, how much do you have to pay?

Would the investment be acceptable to you : You have been offered the opportunity to buy into a real estate investment. The investment is expected to pay out about $16,450 after-tax dollars a year.

Find remaining balance after initial interest rate period : You have obtained a 30-year adjustable rate mortgage at 3.74% with a principal of $864,125. The adjustment period is 4/2 with a cap structure of 2/8.

How many quotes the authors recommend : When obtaining a mortgage, in order to not be taken, paying a much higher rate than neccessary, which can easily cost well over 100,000 additional dollars.

User Account

All Pages