Accrued interest on a bond

CFA Level I
#1

Think we have to do this? I don’t think I have seen any questions on it yet but it was in the book.

#2

Do you mean to calculate the interest expenses of a discount/premium bond?

#3

I have seen one regarding the dirty and clean price and what was the accrued interest, but that was in schweser

#4

getterdone Wrote: ------------------------------------------------------- > I have seen one regarding the dirty and clean > price and what was the accrued interest, but that > was in schweser If you refer to this… I have seen 3 or 4 questions on stalla

#5

Like say you have a bond with a 6% coupon, you buy $1,000,000. Semi annual coupon, maturity date is 12/15/10. Settlement date is 5/12/08. How much accrued do you owe? I made that up, hopefully it works out. And, to boot, who owes, buyer or seller?

#6

amberpower Wrote: ------------------------------------------------------- > Like say you have a bond with a 6% coupon, you buy > $1,000,000. Semi annual coupon, maturity date is > 12/15/10. Settlement date is 5/12/08. How much > accrued do you owe? > > I made that up, hopefully it works out. > > And, to boot, who owes, buyer or seller? I just found 3 or 4 questions asking to calculate the dirty and clean price.

#7

Okay thanks.

#8

amberpower Wrote: ------------------------------------------------------- > Like say you have a bond with a 6% coupon, you buy > $1,000,000. Semi annual coupon, maturity date is > 12/15/10. Settlement date is 5/12/08. How much > accrued do you owe? > > I made that up, hopefully it works out. > > And, to boot, who owes, buyer or seller? 149/365*(60,000/2)=$12,246.58 the buyer owes the seller accrued interest

#9

I am getting 11,000. I used 180 days though.

#10

Are you guys using the bond spreadsheet with TI BA?

#11

I do map

#12

quick and dirty:)

#13

map1 Wrote: ------------------------------------------------------- > quick and dirty:) Indeed :wink:

#14

Ooops, forgot about it.

#15

24,500.

#16

amberpower Wrote: ------------------------------------------------------- > 24,500. remember a 6% coupon paid semiannually will be 3% of principal so 24,500/2

#17

1,000,000 x .06 = 60,000 for whole year. Divide by 2 = 30,000. You did that above.

#18

yes amber i f-d up… i should have wrote 149/182.5*(60,000/2)=$24,493.15 the buyer owes the seller accrued interest sorry, working on too many things at once

#19

I understand, doing the same thing.