An investor is considering purchasing a $100 par-value bond with a 6.0% semi-annual coupon and a 10-year maturity. The ask price of this bond is 100-16. The investor would purchase the bond 3 months into the 182- day semi-annual coupon period. Please assume a month has 30 days. Detail the following. Be sure to show all work: a. The clean (flat) ask price of the bond in dollars: b. The bond has a 4 tick bid/ask spread. What is the bid price in dollars? c. The dirty (invoice) price of the bond (please include accrued interest): d. The semiannual coupon amount ($) for this bond is: e. Using the clean (ask) price of the bond and the Excel (RATE) function, compute the yield to maturity (%): f. Using the clean (ask) price of the bond, what is the current yield on the bond? Edit View Insert Format Tools Table 12pt Paragraph BIU A✓ l✓ T² OP 24 Ev D M $ ⠀

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Your Question:
An investor is considering purchasing a $100 par-value bond with a 6.0% semi-annual coupon and a 10-year
maturity. The ask price of this bond is 100-16. The investor would purchase the bond 3 months into the 182-
day semi-annual coupon period. Please assume a month has 30 days. Detail the following. Be sure to show all
work:
a. The clean (flat) ask price of the bond in dollars:
b. The bond has a 4 tick bid/ask spread. What is the bid price in dollars?
c. The dirty (invoice) price of the bond (please include accrued interest):
d. The semiannual coupon amount ($) for this bond is:
e. Using the clean (ask) price of the bond and the Excel (RATE) function, compute the yield to maturity (%):
f. Using the clean (ask) price of the bond, what is the current yield on the bond?
Edit View Insert Format Tools Table
12pt Paragraph
BIU A✓ l✓ T²
OP
24 Ev D M
$
⠀
Transcribed Image Text:An investor is considering purchasing a $100 par-value bond with a 6.0% semi-annual coupon and a 10-year maturity. The ask price of this bond is 100-16. The investor would purchase the bond 3 months into the 182- day semi-annual coupon period. Please assume a month has 30 days. Detail the following. Be sure to show all work: a. The clean (flat) ask price of the bond in dollars: b. The bond has a 4 tick bid/ask spread. What is the bid price in dollars? c. The dirty (invoice) price of the bond (please include accrued interest): d. The semiannual coupon amount ($) for this bond is: e. Using the clean (ask) price of the bond and the Excel (RATE) function, compute the yield to maturity (%): f. Using the clean (ask) price of the bond, what is the current yield on the bond? Edit View Insert Format Tools Table 12pt Paragraph BIU A✓ l✓ T² OP 24 Ev D M $ ⠀
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