Answer:
$1,042
Explanation:
The computation of the clean price of the bond is shown below:-
Coupon payment = Coupon percentage × Par value ÷ Semi-annually
= 7.2% × $1,000 ÷ 2
= $36
Accrued interest = Coupon payment ÷ 6 × 2
= $36 ÷ 6 × 2
= $12
Clean price of the bond = Invoice price - Accrued interest
= $1,054 - $12
= $1,042
We simply deduct the accrued interest from the invoice price so that the clean price of the bond could come
