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VERY BRIEFLY IN YOUR OWN WORDS DEFINE 3 OF THE FOLLOWING 7 in finance DV01 Duration...

VERY BRIEFLY IN YOUR OWN WORDS DEFINE 3 OF THE FOLLOWING 7 in finance

DV01
Duration
Modified Duration
Convexity
dirty price
clean price
accrued interest
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Answer #1

1: Dirty Price: Price of a bond represents the present value of future cash flows. Dirty price of a bond is the price of a bond inclusive of accrued interest which has collected since the issue of the most recent coupon payment.

2: Clean price of the bond is the price of the bond excluding accrued interest. Hence clean price is equal to dirty price minus accrued interest.

3: Accrued interest refers to interest accumulated but not paid and is based upon coupon rate , day count convention and the number of days passed from the previous coupon payment date.

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