A $1,000 par, semiannual-pay bond is trading for 89.14, has a coupon rate of 8.75%, and has accured interest of $43.72. the clean price of the bond is: a. 847.69 b. 891.40 c. 935.12 d. 1,000 the correct answer is a, but isn’t the clean price=price of the bond - accured interest?
Prices are quoted clean. dirty price = clean + accrued.
I think this was discussed before. The consensus was that for bonds, quoted price is their clean price.
am confused…if quoted price is clean price, and quoted is 891.14, and question is for clean price, how is the answer A and not B? I would check off B if i saw this on saturday. I trade bonds all the time and if broker told me the price is 89.14 i know the price is 891.4 plus accrued. Am i wrong?
So the correct answer should be B then?
Correct answer would be B in the US.