EBK ESSENTIALS OF INVESTMENTS
EBK ESSENTIALS OF INVESTMENTS
10th Edition
ISBN: 8220102800267
Author: Bodie
Publisher: YUZU
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Chapter 10, Problem 29PS
Summary Introduction

To calculate:

The bond price where10%paid semi-annually on every January 15 and July 15 is quoted as selling at an ask price of101.25%.

Introduction:

The bond price or invoice price is the price which is ought to be actually received at the settlement date and that price includes accrued interest also.

The price quoted for a bond is almost always the flat price/clean price of the bond. This means that it excludes the interest accrued in this coupon period.

The lowest price which is best for selling a bond by the dealer is called ask price.

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