When you buy a bond, the date of purchase (the settlement date) is often between two coupon payme...
When you buy a bond, the date of purchase (the settlement date) is often between two coupon payment dates. In this situation, the price you pay (the invoice price) is the sum of the flat price and the accrued interest. Invoice price = Flat price + Accrued Interest For a semi-annual payment coupon bond, the accrued interest In this exercise, you compute the invoice price of a $1000 par value, 5% semi-annual payment coupon bond maturing on 30th June 2025 for various settlement dates. Use a yield to maturity of 6.2%. a) Calculate the invoice price (as a percentage of par value and in dollars) when the settlement date is 30th June 2019. b) Calculate the invoice price (as a percentage of par value and in dollars) when the settlement date is 5th September 2019. Calculate in excel with functions.
Can you post the excel formulas that you used to solve this please?
1. What is the invoice price when the settlement date is 30
th
June 20
19?
A.
932.68
B.
933.49
C.
940.63
D.
943.15
E.
951.18
2. What is the invoice price when the settlement date is 5
th
September 2019?
A.
932.68
B.
933.49
C.
940.63
D.
943.15
E.
951.18
Homework Answers
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