You purchase $100 million par of an 8.5% coupon Treasury bond that matures in November 15,...

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Finance

You purchase $100 million par of an 8.5% coupon Treasury bondthat matures in November 15, 2028. Quoted price is 100-12. Thesettlement date is September 10, 2018. Calculate the cash amountyou have to pay. Coupons are paid semiannually.

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4.5 Ratings (1127 Votes)

Given Par value of investment 100 Million Coupon85 and Quoted price 10012 Since it is a Treasury bond Government the quote is multiples of 32 Hence 12 has to be converted into by dividing by 32 and the same is to be added to the handle ie 100 Therefore quoted price 1001232 1000375 100375 Broken period interest See Answer

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