Problem:
Suppose that a Treasury bond (with a face value of $1,000) is purchased between two coupon dates. The days between the settlement date and the next coupon date is 58 days. There are 183 days in the coupon period. Suppose that the bond purchased has a coupon rate of 7% and there are 10 semiannual payments remaining. Assume a 5% annual required yield.
Required:
Question 1: What is the full price of this bond?
Question 2: What are the accrued interest and the clean price for this bond?
Note: Explain all steps comprehensively.