Calculate the cash price of the following bond, sold on September 21 par $1,000 coupon rate 4 percent, paid on January 1 and July 1 quoted price $956 Explain why the cash price is different from the quoted price ...

Cash Price Quoted price Accrued interest 956 1000 X 004 X 31 ...

Calculate the cash price of the following bond, sold on September 21: par = $1,000; coupon rate

Question:

Calculate the cash price of the following bond, sold on September 21: par = $1,000; rate = 4 percent, paid on January 1 and July 1; quoted price = $956. Explain why the cash price is different from the quoted price.

Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...