Assume that a bond has a market value of $1,097.71. This value is the full or "dirty" price. It is an investment grade security with a coupon of 8%, paid semi-annually. Currently, you are 100 days into this bond's 182-day coupon period. Calculate the clean price of this bond.

Explanation: The clean price of the bond is simply the total or dirty price less AI (accrued interest). Since you are currently 100 days into a 182-day coupon period, 54.9% of the $40 interest payment has accrued and is owed to the seller. Thus .549 x 40 = $21.98 is deducted from the full price to determine the actual bond value to the buyer. The clean price = $1,097.71 - $21.98 = $1,075.73.