senting bond equations, we will use both symbols from time to time. There
should be no confusion from this.
A NOTE ON ACCRUED DAYS IN THE
SETTLEMENT PERIOD (A IN EQUATION 6.1)
AND DATED DATE
The settlement period starts on the date of the last interest payment. But what
happens if the upcoming interest payment is the first interest payment? This
will happen in the case of new issues. The date used is the dated date of the
bond. The dated date is, almost always, the date the bond starts to accrue
interest.
Suppose a new issue of bonds is sold in mid-June 2002, has interest pay-
ments on June 1 and December 1, and matures on June 1, 2012. Its dated date
would probably be June 1, 2002. Interest will start to accrue from June 1, 2002.
In a very few cases, ...