Question: Question 2 (18 marks) a) $200,000 U.S. Treasury 7 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar

Question 2 (18 marks) a) $200,000 U.S. Treasury 7 7/8% bond

Question 2 (18 marks) a) $200,000 U.S. Treasury 7 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar price of 105-20 (this is the clean price) with a yield to maturity of 7.083% with the bond originally being issued at 11/15/1977. Face value per unit is $1,000. i) Calculate the clean price of the bond issue ii) Calculate the accrued interest of the bond issue iii) Calculate the full price of the bond issue (12 marks) b) $200,000 U.S. Treasury 7 7/8% bond maturing in 2002 purchased and then settled on October 23, 1992, at a dollar price (clean price) with a yield to maturity of 7.083% with the bond originally being issued at 11/15/1977. Calculate the full price (per unit of the bond). (6 price) Note: On a per unit basis, the answers to (a) and (b) should be the same. Any difference must be due to rounding error only

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