Asked by Victoria Overbey on Jun 25, 2024
Verified
A 6% coupon U.S. Treasury note pays interest on May 31 and November 30 and is traded for settlement on August 10. The accrued interest on the $100,000 face amount of this note is ________.
A) $581.97
B) $1,170.33
C) $2,327.87
D) $3,000
U.S. Treasury Note
A marketable U.S. government debt security with a fixed interest rate and a maturity between one and ten years.
Accrued Interest
The interest that has accumulated on a bond or other fixed-income security since the last interest payment was made.
Settlement
The process of exchanging payment for financial transactions, including securities, at their completion.
- Learn to calculate accrued interest for bonds based on varying payment frequencies.
Verified Answer
DG
Denisse GarcíaJun 28, 2024
Final Answer :
B
Explanation :
Accrued interest = 100,000(.06/2)(71/182) = 1,170.33
Learning Objectives
- Learn to calculate accrued interest for bonds based on varying payment frequencies.