14 September 2010
Ex-Interest-Ex interest, means "without interest" and is the portion of coupon interest between settlement date and next coupon date. It is payable by the previous investor to the new investor where bonds transacted are settled after book close datebut before coupon date. This is because it is assumed that the new investor will have insufficient time to registerthe bond. Thus the previous investor receives the full coupon and pays the portion of interest not due to him, i.e to the new investor
Cum interest means "with interest" and is the portion of accrued interest between settlement date and the last coupon date. It is payable by an investor to the previous investor as the new investor is obviously not entitled to the full coupon, as she or he has not held it for the full period.
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