Clean & Dirty Price

swarnendupathak
Finance Junkie
Posts: 119
Joined: Mon Sep 17, 2012 11:06 am

Clean & Dirty Price

Postby swarnendupathak » Sun Oct 28, 2012 11:56 pm

Hi,
A USD 1000 par corporate bond carries a coupon rate of 6%, pays coupon semiannually & has 10 coupon payments to maturity. Market rates are currently 5%. There are 90 days between settlement & next coupon payments. Find the dirty & clean price of the bond.
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Please help....

Swarnendu

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content.pristine
Finance Junkie
Posts: 356
Joined: Wed Apr 11, 2012 11:26 am

Re: Clean & Dirty Price

Postby content.pristine » Mon Oct 29, 2012 3:34 pm

Clean Price, how you find the Price using the TVM function keys on your calculator.
Accrued Interest = 1000*6%*3/12 = =15 (It has been 3 Months since the last coupon)
Dirty Price = Clean Price + AI

I think you can find the answer now :)

8-)


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