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Bond pricing and returns

• Clean price: the quoted bond price, excluding accrued interest
• Dirty price: the actual purchase price, including accrued interest
• Accrued interest: unpaid interest earned since the last coupon payment, added to the bond price when traded

Bond yields and returns

• Coupon rate: the fixed annual interest paid, based on the bond’s face value
• Current yield: annual coupon payments as a percentage of the bond’s current market price
• Yield to maturity (YTM): the total return if held until maturity, factoring in price changes and reinvested coupons

Bond structure and maturity

• Bond face value: the amount repaid at maturity
• Bond maturity: the date when the bond’s life ends, and the face value is repaid

What's the relation between bond prices and bond yields?

Bond prices and bond yields are inversely proportional. This means that when the price of a bond increases, its yield decreases, and vice versa.

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