Bond Prices

If the price of a bond is lower than the face value, we say that it is trading at a discount.
If the price of a bond is equal to the face value, we say that it is trading at par.
If the price of a bond is higher than the face value, we say that it is trading at a premium.

The price of a bond is heavily influenced by several factors, which will be explored in subsequent sections.
The clean price of a bond does not include accrued interest that is due to the bond holder. This is often the price that is used in the US.
The dirty (or invoice) price of a bond include accrued interest, hence it is the present value of all future cash flows. This is often the price that is used in Europe.