Accrued Interest

In the context of bonds, accrued interest: c) equals interest earned from the previous cuopon to the sale date d)covers the part of the next cuopon payment not earned by seller

if you hold a bond, and you sell with in between coupon payment periods, this means that there is some accrued interest owed to you… so, the person buying the bond must pay you for it… so the answer is… hmmm… C?

gotta hate those wordings… but at the same time D specifies that the seller doesn’t earn it. And the word “interest” is vague. D? (just a guess)

hmmm, but actually, the seller does earn it… which is why the buyer has to pay the seller the accrued interest…yeh? like, lets say we’ve got an annual-coupon bond… last coupon was paid in january 1… so, from january 2 onwards, the holder of the bond is entitled to the future coupon payment (pro-rated by the time he hold the bond)… so, if he sells the bond on february 1, the buyer of the bond must pay him one month’s worth of coupon… ie. accrued intrest