Question

Given that settlement date of a bond is July 3, 2018 and the
previous coupon date was June 30, 2018 and maturity date is June
30, 2020. **What would be the fraction (f) to use to find the
bond's dirty price on August 1, 2018?**

Answer #1

Fraction (f) in calculation of dirty price is the **time
period that has passed since the date of last coupon
payment** divided by **360 days.**

In the above case, previous coupon date was June 30, 2018 and dirty price is to be calculated on August 1, 2018. Thus total days since last coupon payment are 32 days.

Therefore, fraction (f) = 32 days
360 days = **0.0889 (approx)**

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comment below. I would be happy to help.
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