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Answer: $8,500
A U.S. corporate bond uses a 30/360 day count convention. - Days between July 1st and August 5th = 30 + 4 = 34 - Days between July 1st and January 1st = 180 Per $100 face value, accrued coupon is: $9\% \times \frac{100}{2} \times \frac{34}{180} = 0.8500$ For $1 million face value: $0.8500 \times \frac{1,000,000}{100} = 8,500.00$ So the accrued interest is **$8,500**.
Author: Manit Arora
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Q-168.2. A U.S. corporate bond pays a 9.0% semi-annual coupon on January 1st and July 1st. If an investor owns $1 million in face value of the corporate bond, what is the accrued (coupon) interest as of August 5th, 2011?
A
$8,315
B
$8,500
C
$8,560
D
$8,750
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