The accrued interest on a bond is the proportion of the bond’s coupon which has been accrued, or ‘earned but not yet paid’, since the last coupon payment.
The clean price of a bond is the price of the bond excluding any accrued interest and, in most but not all markets, is the price quoted and dealt in the market. It is usually expressed as the clean price of 100 units of the bond’s face value.
The dirty price of a bond is the price of the bond including any accrued interest. This is the all-in price actually paid for the bond.
The issuer of a bond makes regular coupon payments – usually annually, semi-annually or quarterly – to each bondholder. Apart ...