Today, June 15, you want to buy a bond with a quoted price of 98.64. The bond pays interest on January 1 and July 1. Which one of the following prices represents your total cost of purchasing this bond today?

Question

Quizplus · Accepted Answer

The total cost of the bond includes the quoted price plus accrued interest, which is the interest that has accumulated since the last interest payment date. The dirty price includes this accrued interest, whereas the clean price does not. The asked price and bid price refer to the prices at which someone is willing to sell or buy the bond, respectively, and may not be relevant to the total cost of purchasing the bond.

Today, June 15, You Want to Buy a Bond with a Quoted