Compute dirty price of this transaction

Reference no: EM139389

Q. On October 5, 2013, you bought a $12,000 T-note which matures on August 15, 2024 (settlement happens 2 days after purchase, so you get actual ownership of bond on October 7, 2013). Coupon rate on T-note is 4.386% also present price quoted on bond is 105:19 (or 105.59375% of face value of the T-note). Last coupon payment occurred on May 15, 2013 (145 days before settlement), also next coupon payment will be paid on November 15, 2013 (39 days from settlement).

a) Compute accumulated interest due to seller from buyer at settlement.

b) Compute dirty price of this transaction.

Reference no: EM139389

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