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(2) Suppose that it is March 9, 2015, and the bond under consideration is an 9% coupon payment due on July 10, 2034, with a q
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Answer #1

Bond's Quoted Price= $1000*95.06=$950.6

Semi annual interest= $1000*9%*6/12=45

Number of days from jan 10th 2015 to March 9th 2015 = 58 days

Proportionate interest=45*58/180=$14.5

Dirty price is determined by adding accrued interest to quoted price.

Therefore Dirty price=$950.6+$14.5= $965.1

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