- CFA Exams
- CFA Level I Exam
- Topic 6. Fixed Income
- Learning Module 44. Introduction to Fixed-Income Valuation
- Subject 3. Flat Price, Accrued Interest, and the Full Price

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**CFA Practice Question**

Accrued interest is defined as ______.

B. being equal to or less than the reference rate as long as the reference rate is within a certain range at the reset date

C. the amount of interest accrued since the last coupon payment; usually the bond seller must pay the bond buyer the accrued interest

A. the amount of interest accrued since the last coupon payment; usually the bond buyer must pay the bond seller the accrued interest

B. being equal to or less than the reference rate as long as the reference rate is within a certain range at the reset date

C. the amount of interest accrued since the last coupon payment; usually the bond seller must pay the bond buyer the accrued interest

Correct Answer: A

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**User Contributed Comments**
3

User |
Comment |
---|---|

SSPatel |
The accrued interest belongs to the seller but will not be paid until the coupon date; therefore, the new bondholder will receive the seller's portion of the interest too. |

Bibhu |
This comes when Bond has a new buyer. The new buyer has to pay accrued interest to the bond seller for elapsed time. |

johntan1979 |
A is the norm, which is dirty C is clean |