AIWMI Exam CCRA-L2 Topic 1 Question 99 Discussion

Actual exam question for AIWMI's CCRA-L2 exam

Question #: 99
Topic #: 1

A coupon bond is trading at 110% of the USD 1000 par value. If the last interest payment was made one month ago and the coupon rate is 12%, the accrued interest on this bond is_______

A110

B100

C120

D10

Show Suggested Answer

Suggested Answer: D

by Ellsworth at Sep 19, 2024, 01:55 PM

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Olive

10 months ago

I'm totally acing this exam, and I've got the answer right here. D) 10 is the way to go, no doubt about it. Unless, of course, the bond is made of chocolate. Then the answer would be 'eat the whole thing'.

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Charlena

9 months ago

Actually, I believe it's D) 10. The accrued interest is just the coupon rate times the par value, regardless of the trading price.

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Crista

9 months ago

I'm pretty sure it's A) 110. The bond is trading at 110% of the par value, so the accrued interest should be the same.

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Meghann

10 months ago

I think the answer is C) 120. The accrued interest should be 12% of the par value.

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Aileen

11 months ago

This is a tricky one! I'm going to go with C) 120, just to keep things interesting. Who needs accurate answers when you can have fun, right?

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Angelyn

9 months ago

I'll choose C) 120.

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Ma

10 months ago

I'm going with B) 100.

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Blondell

10 months ago

I think the answer is A) 110.

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Trina

11 months ago

Ah, the age-old question of accrued interest. I'm pretty sure the answer is 10, but I'll double-check my calculations just to be sure. Yep, definitely D) 10.

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Suzi

9 months ago

Yes, I'm sure. It's 10.

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Dortha

10 months ago

Are you sure? I calculated it to be 110.

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Aileen

10 months ago

No, it's actually 10.

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Stephane

10 months ago

I think it's 120.

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Lynelle

11 months ago

I'm not sure, but I think it's C) 120 as well. The bond is trading above par value, so the accrued interest should be higher.

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Nikita

11 months ago

Hmm, let's see. If the bond is trading at 110% of the par value, that means it's worth USD 1,100. And with a 12% coupon rate, the accrued interest must be 10, right? D) 10 is the answer.

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