The difference between the clean price and dirty price of the bond. Introduction: A bond refers to the debt securities issued by the governments or corporations for raising capital. The borrower does not return the face value until maturity. However, the investor receives the coupons every year until the date of maturity. Clean price refers to the price of the bond instrument stated after deducting the accrued interest. Dirty price refers to the price of the bond instrument stated before deducting the accrued interest.

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Chapter 6, Problem 6.5CCQ

Summary Introduction

To discuss: The difference between the clean price and dirty price of the bond.

Introduction:

A bond refers to the debt securities issued by the governments or corporations for raising capital. The borrower does not return the face value until maturity. However, the investor receives the coupons every year until the date of maturity.

Clean price refers to the price of the bond instrument stated after deducting the accrued interest.

Dirty price refers to the price of the bond instrument stated before deducting the accrued interest.

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