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Cum Interest


In relation to fixed interest bearing securities (bonds, notes, debentures, etc), cum interest includes, in addition to the cost or price, the interest accrued up to the date of purchase. When interest becomes due, it would be the right of the buyer to claim that altogether. For example, if the price paid for a bond includes the interest until the date of purchase, the purchase price will be calculated on a cum-interest basis. Therefore, the purchase price is equal to the principal plus the accrued interest.



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