An 8% coupon U.S. Treasury note pays interest on May 30 and November 30 and is traded for settlement on August 15. The accrued interest on the $100,000 face value of this note is
A. $491.80.
B. $800.00.
C. $983.61.
D. $1,661.20.
E. None of the options are correct.
D. $1,661.20.
76/183($4,000) = $1,661.20. Approximation: .08/12 × 100,000 = 666.67 per month. 666.67/month × 2.5 months = 1.666.67.
Business
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