Question

The dated date of a municipal bond is january 1, 2014. the first coupon date is august 1, 2014. the first coupon will represent how many months of interest?

Answer 1

In this item, we are asked to determine the number of months of interest in which the first coupon will represent. This can be answered by determining the gap between the dated date of the municipal bond and the date in the first coupon. We know that the gap from January 1 to August 1 is 7 months.