Bond Pricing: Dirty Price, Clean Price and Accrued Interest
1. Context
In this video from FRP Part 1 and CFA Level 1 curricula, through a solved example, we take a look at how bond pricing works when settlement date is somewhere between coupon dates. The solved example involves calculation of the accrued interest, clean price and dirty price for a chosen bond. The calculator steps are also demonstrated alongside. This video forms an addendum to the FRM Part 1 preparation course (https://www.finRGB.com/courses/frm-part-1-online-course). The details of the readings in which this topic appears are given below:
| Area | Financial Markets and Products, Valuation and Risk Models |
| Reading | Pricing Conventions, Discounting, and Arbitrage |
| Reference | Chapter 9. Pricing Conventions, Discounting, and Arbitrage, Official GARP Books (VRM Section, 2021). |