CFA Practice Question

There are 490 practice questions for this study session.

CFA Practice Question

Accrued interest is defined as ______.

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

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
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