Answer: $9.03

**Explanation:** To calculate accrued interest using the 30/360 day-count convention: 1. **Bond details:** - Coupon rate: 5% annual - Semi-annual coupon payment = 5% × $1,000 ÷ 2 = $25 - Settlement date: February 5 - Payment dates: May 31 and November 30 2. **Determine the previous coupon date:** Since settlement is on February 5, the previous coupon date was November 30 of the previous year. 3. **Calculate days between November 30 and February 5 using 30/360 convention:** - November: 30 days (from 30th to 30th = 0 days, but we count from 30th to end of month = 0 days in 30/360) - December: 30 days - January: 30 days - February: 5 days Total days = 0 + 30 + 30 + 5 = 65 days 4. **Calculate days in coupon period:** From November 30 to May 31: - November: 0 days (from 30th) - December: 30 days - January: 30 days - February: 30 days - March: 30 days - April: 30 days - May: 31 days (but in 30/360, May 31 is treated as 30 days) Total = 0 + 30 + 30 + 30 + 30 + 30 + 30 = 180 days 5. **Calculate accrued interest:** Accrued interest = (Days accrued ÷ Days in coupon period) × Coupon payment = (65 ÷ 180) × $25 = 0.361111... × $25 = $9.02778 ≈ $9.03 Therefore, the correct answer is **A. $9.03**.

Author: LeetQuiz .