Dirty price
Principles of Finance glossary · Valuation of Bonds & Stocks
Definition
A bond's price including accrued interest; the amount actually paid in settlement.
Dirty price in plain English
Bonds pay interest at set dates (say every six months), so on any day in between, the current owner has 'earned' some interest that hasn't been paid out yet. The dirty price is the bond's quoted value PLUS that earned-but-unpaid interest — it's the actual dollar amount a buyer hands over at settlement. Imagine buying a fridge that's been slowly filling with cash for the next payout; you have to reimburse the seller for the coins already inside, on top of the fridge's own price. That reimbursement is the accrued interest, and price-with-it-included is 'dirty.'
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