Explanation:
For U.S. corporate or municipal bonds, accrued interest uses 30/360 day count.
$1,000 × 8% / 2 = $40So the correct answer is $14.22.
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Q-170.2. Assume the bond parameters above—that is, $1,000 par with 8.0% semiannual coupon bond that settles on March 5th, 2011 with last coupon on January 1st and next coupon on July 1st—but the bond is instead a U.S. corporate bond (or municipal bond, for that matter). What is the accrued interest?
A
$13.93
B
$14.00
C
$14.14
D
$14.22
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