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In finance, the dirty price is the price of a bond including any interest that has accrued since issue of the most recent coupon payment. This is to be compared with the clean price , which is the price of a bond excluding the accrued interest .
AAA-rated bonds are the safest, while lower-rated bonds offer higher yields but come with more risk. How to Buy Municipal Bonds Municipal bonds can be purchased through various channels:
The rationale is simple to explain. A bond with a fixed interest rate becomes less valuable when overall interest rates climb. Imagine a bond that pays 5 percent, but the economic climate means ...
Comparatively, the dirty price is the price of a bond including the accrued interest. Therefore, Clean Price = Dirty Price − Accrued Interest. In Bloomberg Terminal or Reuters, bond prices are quoted using the clean price. Traders tend to think of bonds in terms of their clean prices. Clean prices are more stable over time than dirty prices.
The price of a bond which includes this accrued interest is known as the "dirty price" (or "full price" or "all in price" or "Cash price"). The "clean price" is the price excluding any interest that has accrued. Clean prices are generally more stable over time than dirty prices.
Bond prices and interest rates are closely related and can both be used to forecast economic activity, so investors should at least be aware of the basics: how interest rates affect bond prices ...
The coupon (of a bond) is the annual interest that the issuer must pay, expressed as a percentage of the principal. The maturity is the end of the bond, the date that the issuer must return the principal. The issue is another term for the bond itself. The indenture, in some cases, is the contract that states all of the terms of the bond.
The Bank of England was forced to step in and intervene by effectively limiting the margin call vicious circle and a very likely slaughterhouse in the domestic pension fund industry.