6 Questions
What is accrued interest when purchasing a security?
Interest accrued from the last due date till the date of purchase
What is the characteristic of an ex-interest price?
Excludes the accrued interest
What happens to the accrued interest in a cum-interest price scenario?
It is purchased by the purchaser and belongs to him
In the context of purchasing securities, what is the total payment made by the purchaser for an ex-interest price?
Cost of investment
How does pre-acquisition interest impact the cost of investment for a purchaser in a cum-interest price situation?
Reduces the cost of investment
In which scenario does a purchaser retain the accrued interest as part of his investment?
'Cum-interest' price scenario
Learn about the calculation of accrued interest when purchasing a security, considering interest earned from the last due date. Also explore the concept of ex-interest price and how it may affect the overall cost of a security purchase.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
