SIE practice questionhardAccrued interest
How is accrued interest paid to the seller of a corporate bond?
- AIssuer pays seller directly
- BBuyer pays seller interest earned since last payment✓ Correct answer
- CIt is included in the bond’s yield
- DIt is not paid if the bond trades between coupon dates
Explanation
Why B — Buyer pays seller interest earned since last payment
The buyer owes the seller interest accrued since the last payment. Issuers pay interest only on payment dates.
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