High School
SAT
ACT
University
MCAT
LSAT
DAT
Wize University Introduction to Finance Textbook > Bond Valuation

Cash Price vs Quoted Price

The Current YieldPrevious Section
ConsolsNext Section
Popular Courses
Find My Course
0:00 / 0:00

Cash Price vs. Quoted Price

  • Cash price is the actual amount a buyer will pay a seller for a bond.
  • Cash price includes accrued interest (accumulated interest since previous payment was made).
  • Cash price is also called the invoice price or the dirty price.
  • Quoted price is the present value of the bond excluding any accrued interest.
  • Quoted price is also called the clean price.


Wize Tip
When counting the number of days of accrued interest, you have to count the number of days since the previous coupon was paid excluding the date of the previous coupon payment but including the current date in the question.

Watch Out!
There are 181 days between January 1st and June 30th, and there are 184 days between July 1st and December 31st.



0:00 / 0:00

Example: Cash Price

Today is October 11 and a bond is quoted at 98.44. The bond has a face value of $1,000, coupon rate of 6% and is paid semi-annually on December 31st and June 30th.

a. What is the quoted price?
Quoted price = 1000 x 98.44% = 984.40
b. How much interest has accrued?
1000⋅6%2⋅103184=16.791000\cdot\frac{6\%}{2}\cdot\frac{103}{184}=16.79
c. What is the cash price?
Cash price = 984.40 + 16.79 = 1,001.19
Extra Practice
Today is November 12th. A bond with a face value of $1000 and a coupon rate of 10% paid semi-annually on December 31st and June 30th. If the bond is sold today for $984.55, what is the quoted price?
Round your work to at least 6 decimal places and final answer to 2 decimal places.
Today is March 5th. A bond with a face value of $1000 and a coupon rate of 8% paid semi-annually on January 31st and July 31st. If the bond is sold today for $1003.40, what is the bond quote?
Round your work to at least 6 decimal places and final answer to 2 decimal places.
Today is August 23rd. A bond with a face value of $900 and a coupon rate of 4.8% paid semi-annually on January 15th and July 15th. If the bond is quoted at 101.44 what is the cash price of the bond?
Round your work to at least 6 decimal places and final answer to 2 decimal places.
Today is October 11th. A bond with a face value of $1,000 and a coupon rate of 6% paid semi-annually on December 31st and June 30th. If the bond is quoted at 98.44 what is the cash price of the bond?
Round your work to at least 6 decimal places and final answer to 2 decimal places.
Today is January 5th, 2022. A bond with a face value of $1,000 and a coupon rate of 12% paid semi-annually on December 31st and June 30th. If the bond is quoted at 99.421 what is the cash price of the bond?
Round your work to at least 6 decimal places and final answer to 2 decimal places.