Carat is the unit of weight for all gemstones. One carat is subdivided into 100 "points". There are five carats in a gram. As diamonds increase in size, their cost tends to increase exponentially.
The clarity of a diamond refers to the presence of inclusions within the stone. Practically all diamonds contain naturally occurring internal inclusions. These are generally either foreign materials, such as carbon or other minerals which were trapped inside the diamond as it has grown around them, or clear inclusions such as fractures and tiny imperfections in the structure of the diamond. The size, nature, location and amount of inclusions determine a diamond’s clarity grade and affect its value.
Colour refers to the natural body colour of a diamond and not to the reflection of spectral colours that flash when a diamond moves. Most diamonds naturally exhibit slight hints of yellow, brown, or grey, and so the less colour a diamond exhibits, the higher its value due to the rarity of colourless material. Colour quality is graded via an alphabetical system, ranging from D (colourless) to Z (light yellow). Each letter grade represents a range of colour and is a measure of how noticeable that colour is.