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On October 5, 2015, you purchase a $10,000 T-note that matures on August 15, 2027 (settlement occurs two days after purchase, so you receive actual ownership of the bond on October 7, 2015). The coupon rate on the T-note is 4.375 percent and the current price quoted on the bond is 105.250 percent. The last coupon payment occurred on May 15, 2015 (145 days before settlement), and the next coupon payment will be paid on November 15, 2015 (39 days from settlement).

a. Calculate the accrued interest due to the seller from the buyer at settlement. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

b. Calculate the dirty price of this transaction. (Do not round intermediate calculations. Round your answer to 2 decimal places. (e.g., 32.16))

Financial Management, Finance

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