Which of the following statements is TRUE?

Question

Quizplus · Accepted Answer

The quoted price of a bond, also known as the "clean price," does not include accrued interest. It is the price that is typically quoted in the financial markets. However, the actual price an investor pays for the bond, known as the "dirty price" or "invoice price," includes accrued interest. Therefore, the quoted price is the actual price paid only when the bond is sold on the date of a coupon payment, as there is no accrued interest on that date.

Which of the Following Statements Is TRUE