Answer-first summary for fast verification
Answer: $14.22
For **U.S. corporate or municipal bonds**, accrued interest uses **30/360** day count. - Semiannual coupon = $1,000 × 8% / 2 = **$40** - Days accrued under 30/360 from Jan 1 to Mar 5: \[ 30(3-1) + (5-1) = 64 \] - Days in coupon period = **180** \[ \text{Accrued Interest} = 40 \times \frac{64}{180} = 14.22 \] So the correct answer is **$14.22**.
Author: Manit Arora
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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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