Definition of Clean price:
When quoting prices for bonds, they may be either the clean price or the dirty price. The dirty refers to the price of a bond including accrued interest based upon the coupon rate. If a bond quotes between coupon payment dates, the accrued interest up to that day is reflected in the price.
Securities market term for the quoted price of a bond that does not include the interest accrued on the bond. However, to purchase the bond, a buyer will have to pay the quoted price plus the accrued interest (called the dirty price). Common in the UK and elsewhere, but not in the US.
The clean price is the price of a coupon bond not including accrued interest payments. The clean price is typically the quoted price on financial news sites. This price does not include any interest accrued between the scheduled coupon payments for the bond. The opposite of a clean price is the dirty price.
How to use Clean price in a sentence?
- Dirty price is the price of a bond that includes accrued interest between coupon payments.
- The clean price is the price of a coupon bond not including any accrued interest. That is, it doesn't include the accrued interest between coupon payments.
- The clean price is typically the quoted price on financial news sites.
Meaning of Clean price & Clean price Definition