On October 5, 2019, you purchase a $10,000 T-note that matures on August 15, 2031 (settlement occurs two days after purchase, soyou receive actual ownership of the bond on October 7, 2019). The coupon rate on the T-note is 4.375 percent and the current pricequoted on the bond is 105.250 percent. The last coupon payment occurred on May 15, 2019 (145 days before settlement), and the nextcoupon payment will be paid on November 15, 2019 (39 days from settlement).a. Calculate the accrued interest due to the seller from the buyer at settlement.b. Calculate the dirty price of this transaction.(For all requirements, do not round intermediate calculations. Round your answers to 2 decimal places. (e.g., 32.16))a.Accrued interest dueb. Dirty price

Answered: On October 5, 2019, you purchase a…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

On October 5, 2019, you purchase a $10,000 T-note that matures on August 15, 2031 (settlement occurs one day after purchase, so you receive actual ownership of the bond on October 6, 2019). The coupon rate on the T-note is 5.375 percent and the current price quoted on the bond is 105.250 percent. The last coupon payment occurred on May 15, 2019 (144 days before settlement), and the next coupon payment will be paid on November 15, 2019 (40 days from settlement). a)Calculate the accrued interest due to the seller from the buyer at settlement. b)Calculate the dirty price of this transaction.
On Monday March 6, 2023 you purchase a $1,000 Treasury bond that matures on May15, 2031 (settlement occurs one day after purchase, so you receive actual ownership of the bond on Tuesday March 7th, 2023). The coupon rate on the Treasury-note is 4.00 percent. The last coupon payment occurred on November 15, 2022, and the next coupon payment will be paid on May 15, 2023. The price that your dealer quotes you is $978.38 Yields on similar bonds are currently 4.5% Calculate the dirty price of this bond.
On January 1, 2019, Company C issues $200,000 of its 6% bonds which mature in 10 years. Interest is paid annually on December 31. The market (effective) rate of interest is 4%. If the bond sells as 88.2, what is the discount or premium (hint: determine the price of the bond first)?
On July 10, 2012, you purchase a $10,000 par T-note that matures in five years. The settlement occurs on July 11, 2019. The coupon rate is 8 percent and the current price quote is 96.0388 percent. The last coupon payment was on 14 days before settlement, and the next coupon payment will be paid on 169 days from settlement. Calculate the accrued interest due to the seller from the buyer at settlement.
On February I, 2019, Osborn pie sold 12% bonds having a maturity value of $800,000. The bond yields the investors a return of' I 0%. The bonds are dated February 1, 2019, and mature February I, 2024, with interest payable on August I and February I of each year. 1.What will be the carrying value of the bond on December 31, 2019? 2. How much would Osborn pie report as interest expense in the calendar year 2020?3. What is the amortized discount/premium in the calendar year 2021?4, What is the canying value of the boods on December 31, 2022'/
On July 10, 2012, you purchase a $10,000 par T-note that matures in five years. The settlement occurs on July 11, 2019. The coupon rate is 6 percent and the current price quote is 97.6232 percent The last coupon payment was on 14 days before settlement, and the next coupon payment will be paid on 167 days from settlement. Calculate the accrued interest due to the seller from the buyer at settlement. (round your answer to 2 decimal places)
On January 1, 2021, Flamengo Co. issued a four-year, $10,000, 7% bond. The interest is payable annually each December 31. The market interest rate is 8%. Flamengo uses the straight-line amortization method.How much interest will Flamengo pay to the bondholders on December 31 2022? Round to the nearest cent (for example, if 54.238 then type 54.24)
On January 1, 2024, the Cook's Restaurant decides to invest in Lake Dimford bonds. The bonds mature on December 31, 2029, and pay interest on June 30 and December 31 at 6% annually. The market rate of interest was 6% on January 1, 2024, so the $140,000 maturity value bonds sold for face value. Cook's intends to hold the bonds until December 31, 2029. Next, journalize Cook's receipt of interest on June 30, 2024. Accounts and Explanation Requirement 1. Journalize the transactions related to Cook's investment in Lake Dimford bonds during 2024. (Record debits first, then credits. Select the explanation on the last line of the journal entry table.) Begin by journalizing Cook's investment in Lake Dimford bonds on January 1, 2024. Date Accounts and Explanation 2024 Jan. 1 Date 2024 Jun. 30 Now journalize Cook's receipt of interest on December 31, 2024. Date Accounts and Explanation 2024 Dec. 31 Debit Debit Debit Credit Credit Credit C Requirement 2. In what category would Cook's report the…
On Monday 6 March, 2023 you purchase a $1,000 Treasury bond that matures on May 15, 2031 (settlement now occurs one day after purchase, so you receive actual ownership of the bond on Tuesday 7 March, 2023). The coupon rate is 4.0 percent and the current price quoted on the bond is 101.233 percent of par (in dollar terms, $1.012.33). The last coupon payment occurred on November 15, 2022, and the next coupon payment will be paid on May 15, 2023. Calculate the dirty price. Hint: Do NOT round your intermediate steps
On July 01, 2019, SALUDO RAW SA'YO SI MAGELLAN SABI NI LOLA CO. received P1,032,880 for P1,000,000 face amount, 12% bonds, a price that yields 10%. Using the interest method of amortization, how much is the interest expense for the six months ended December 31, 2019? Use the same information in MC 18. What is the bond carrying value at December 31, 2019? a. P1,024,524 b. P1,031,236 c. P1,032,880 d. P1,041,236
Tano Company issues bonds with a par value of $180,000 on January 1, 2019. The bonds’ annual contract rate is 8%, and interest is paid semiannually on June 30 and December 31. The bonds mature in three years. The annual market rate at the date of issuance is 10%, and the bonds are sold for $170,862. 1. What is the amount of the discount on these bonds at issuance? 2. How much total bond interest expense will be recognized over the life of these bonds? 3. Prepare a straight-line amortization table like Exhibit 14.7 for these bonds.
A 4.35% coupon bond is priced at 99.68. The last semi-annual coupon payment was made on June 3, 2019. The next coupon will be paid on December 1, 2019. What is the invoice price on July 6, 2019? a) $1014.58 b) $1003.97 c) $1018.55 d) $1000.77

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