Given this information: What are the Full (Dirty) proceeds of the sale of this bond closest to on August 19th, 2020?

Agro Bonds were issued several years ago. Investor Gadget sells $100 par of the bonds mid-accrual period settlement on 8/19/2020.
Coupon = 6%; Coupon Payment Frequency Semi-annual; Interest Payment Dates are March 31 and Sept 30th; Maturity Date September 30th, 2023; Day Count Convention = 30/360; Yield-to-Maturity 4%

Given this information: What are the Full (Dirty) proceeds of the sale of this bond closest to on August 19th, 2020?
(assume the bond does not accrue interest on 8/19)

Expert Solution

Accrued Interest = Coupon × (Days Since Last Coupon / Days in Current Coupon Period)

= [(6%/2)*$100] x [139/180]

= $3 x 0.7722 = $2.32

Clean Price = Quoted Price = Ask Price
Dirty Price = Invoice Price = Clean Price + Accrued Interest

= $100 + $2.32 = $102.32

jeff jeffy answered 2 years ago

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