Series 7  General Securities Representative Exam
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Your client bought a corporate bond at 106 with a 5% coupon. The trade settled on July 15th. The bond pays interest on February 15th & August 15th (interest payment dates). On top of the bond price, how much will your client pay the previous owner of record in accrued interest?
$31.15
A
$31.62
B
$20.85
C
$19.40
D
Explanations
It is 5 months of accrued interest from February 15th to July 15th (use 30 days for a month / 360 days in a year for bonds). 5 x 30 = 150 days. 150 days of accrued interest. It is a 5% coupon, so $50 / year in interest payments divided by 360 days = .139. .139 X 150 days of accrued interest = $20.85
Pricing
Basic
Part of the questions for each course

 Course
 Questions

 SIE
 20 of 150

 Series 6
 30 of 500

 Series 7
 50 of 625