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12 August, 13:24

You purchase a bond with a coupon rate of 9.2 percent, a par value of $1,000, semiannual coupons, and a clean price of $830. If the next coupon payment is due in five months, what is the invoice price

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  1. 12 August, 13:47
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    invoice price $ 837.67

    Explanation:

    the clean price represent the value of the bon net of interst if the next coupon payment is due in five months there is a month of interest included in the invoice (dirty price)

    principal x rate x time = interest

    1,000 x 0.092 x 1/12 = 7.67

    bond + accued interest = dirty price

    830 + 7.67 = 837.67
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