Question

You purchase a bond with an invoice price of $1,053. The bond has a coupon rate of 5.72 percent, it makes semiannual payments, and there are 4 months to the next coupon payment. The par value is $1,000. What is the clean price of the bond?

$1,033.93

$1,062.53

$1,081.60

$1,043.47

$1,024.40

Answer 1

Bond interest is paid semiannually. It means in every 6 month.
Next coupon due is after 4 month. It means 2 month interest has been accrued, which is included in invoice or purchase value of bond.
Bond's purchase price =					$1,053.00
Bond par value					$1,000.00
Coupon rate					5.72%
Interest for 2 months = 1000 * 5.72% * 2/12					$9.53
Clean price = Purchase price - Accrued interest
	1053.00 - 9.53
	$1,043.47
So, Clean price of bond is $1043.47.