Answer to Question #217857 in Finance for Beauty Magadlela

Question #217857

The next coupon date that follows the settlement date of a bond is 28 October 2021. The half-yearly coupon rate is 7,375%. The accrued interest equals R5,49589%. If this is a cum interest case, the settlement date for this bond is


[1] 11 September 2021. [2] 14 June 2021. [3] 30 July 2021. [4] 29 August 2021. [5] none of the above.


1
Expert's answer
2021-07-19T07:29:02-0400

For cum interest, the settlement date is calculated between the last coupon date and the last settlement date. The next coupon date is given and it is mentioned that it is a half-yearly payment. Thus, the settlement date is assumed to be in June.

Settlement date for this bond is 14th June 2021.


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