SIE Exam Question 338: Answer and Explanation

Question: 338

Accrued interest is calculated from the

  • A. last coupon date and continues to the day prior to the settlement date.
  • B. dated date and continues to the settlement date.
  • C. dated date to the next coupon date.
  • D. last coupon date and continues through the settlement date.

Correct Answer: A

Explanation:

A - Accrued interest is measured from the last interest payment date (coupon date) up to but not including the settlement date of the trade. Settlement date is not included in these accrued interest computations because legal ownership of the bond changes on settlement date and this is the date from which the new owner of the bond begins earning his own interest.

All content of site and practice tests © 2022 Jack.
Quick View

FINRA Practice Tests