Accrued interest on new municipal bonds is calculated from the:Purchase dateSettlement dateDated dateLast interest payment
Dated dateInterest on new municipal bonds is calculated from the dated date, which is the date from which interest starts to accrue on a municipal bond.
Accrued interest on new municipal bonds is calculated from the dated date.
The dated date is the date from which the purchaser of the bond is entitled to receive interest. It is typically the first day of the coupon period and is set by the issuer of the bond.
When an investor purchases a new municipal bond, the bond may not settle or be delivered for a few days or weeks after the purchase date. Therefore, using the settlement date or last interest payment date to calculate accrued interest would not be accurate.
Instead, the accrued interest is calculated by taking the number of days between the dated date and the settlement date and multiplying that number by the daily interest accrual rate. This calculation provides the amount of interest that has accrued on the bond since the dated date and will be paid to the bondholder at the next interest payment date.
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