alleryStart learning →After a coupon is paid, how does a bond's dirty price behave?
ARises by about the coupon
BStays exactly unchanged
CRises to double its value
DFalls by about the coupon
Answer & Solution
Correct answer: D. Falls by about the coupon
Accrued interest resets to zero at the coupon date, so the dirty price falls by about the coupon amount.
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