Answer:
$1,081.53
Explanation:
The computation of the direct price of the bond is shown below:
= Quoted price of the bond + accrued interest payment
where,
Accrued interest payment equal to
= Face value of the bond × number of months ÷ total number of months in a year × coupon rate
= $1,000 × 2 months ÷ 12 months × 6.92%
= $11.53
So, the dirty price is
= $1,070 + $11.53
= $1,081.53
