May 16

Accrued Interest (clean vs. dirty price) - 8 min screencast

by David Harper, CFA, FRM, CIPM

FRM |

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This is a brief screencast example of computing accrued interest on a coupon-bearing bond. A few definitions:

  • The full (a.k.a. dirty or invoice) price is paid by buyer to seller. It includes the accrued interest (fraction of next coupon earned by seller)
  • The clean price (a.k.a., price) is the full price minus (-) the accrued interest

Here is the screencast:

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