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ICMA FMFQ Exam - Topic 6 Question 64 Discussion

Actual exam question for ICMA's FMFQ exam

Question #: 64
Topic #: 6

[All FMFQ Questions]

The dirty price of a bond is which of the following:

AThe same as the clean price

BClean price + interest of the period from the last coupon payment date

CClean price + interest of the period from settlement until the next coupon payment date

DClean price + trading commissions

Show Suggested Answer

Suggested Answer: B

by Moon at Aug 25, 2024, 08:45 AM

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Dominga

10 months ago

B makes the most sense, but I’m still a bit confused!

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Karl

10 months ago

Really? I always thought dirty price was just the clean price.

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Tresa

10 months ago

Wait, I thought it was about trading commissions?

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Dianne

10 months ago

Totally agree, B is the right answer!

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Moira

11 months ago

Dirty price is clean price + interest from last coupon date.

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Ivette

11 months ago

I definitely remember that the dirty price is higher than the clean price because it includes accrued interest. I think it's option B, but I should double-check my notes.

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Jannette

11 months ago

I feel like the dirty price has to do with the clean price plus something, but I can't recall if it's trading commissions or interest. I might need to think this one through.

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Lauryn

11 months ago

I remember practicing a question like this, and I think the dirty price includes the interest accrued since the last coupon payment. So, I might go with option B.

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Jina

11 months ago

I think the dirty price is related to the clean price plus some interest, but I'm not sure if it's from the last coupon or until the next one.

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Janine

11 months ago

Easy one! The dirty price is the clean price plus the interest accrued since the last coupon payment. C is the way to go.

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Roosevelt

11 months ago

The dirty price is the full amount the buyer pays, which includes the clean price plus any accrued interest. So the correct answer is B.

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Filiberto

11 months ago

Hmm, I'm a bit confused on the difference between dirty and clean price. I'll need to review my notes on bond pricing before answering this.

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Lashawna

11 months ago

I'm pretty sure the dirty price includes the accrued interest since the last coupon payment, so I think the answer is C.

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Evan

12 months ago

Hmm, I'm a bit confused on the difference between the processes in this level. I'll need to review my notes to make sure I understand them properly.

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Janey

2 years ago

Bond pricing, huh? I'd rather be pricing my fantasy football lineup. But I digress, C is the way to go.

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Colette

2 years ago

No, it's definitely C. Trust me.

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Maurine

2 years ago

I think it's B, actually.

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Fanny

2 years ago

I agree, C is the correct answer.

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Jolene

2 years ago

I think it's the clean price plus trading commissions, as those are part of the total cost of buying the bond.

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Yuki

2 years ago

I agree with Glory, the dirty price includes the interest for the period until the next coupon payment.

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Glory

2 years ago

No, I believe it's the clean price plus interest from settlement until the next coupon payment date.

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Aide

2 years ago

I think the dirty price of a bond is the same as the clean price.

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Myra

2 years ago

Dirty price? Sounds like something my dog would roll in. Anyway, I'm going with C. Clean price plus that interest thingy.

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Diane

2 years ago

Ugh, I always get these bond pricing questions mixed up. Let me think...I think C is the right one, but I'm not totally sure.

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Eric

2 years ago

Oh, I see. Thanks for clarifying that, I always get confused with bond pricing too.

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Sylvie

2 years ago

Actually, it's B. The dirty price is the clean price plus the interest of the period from the last coupon payment date.

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Sheldon

2 years ago

I agree, C seems to be the most logical choice for the dirty price calculation.

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Stefania

2 years ago

I think C is correct, it includes the interest from settlement until the next coupon payment date.

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Shanda

2 years ago

Clearly the dirty price is the clean price plus the accrued interest until the next coupon payment. C is the correct answer.

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Tamesha

2 years ago

So, the answer is C then. Clean price + interest of the period from settlement until the next coupon payment date.

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Margarita

2 years ago

Yes, that's correct. It's the clean price plus the interest from settlement to the next coupon payment date.

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Karina

2 years ago

I think the dirty price includes the accrued interest until the next coupon payment.

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