How do muni bond price quotes work? and Bond Car

How do muni bond price quotes work?

I'm taking a securities test and was confused about how muni bond prices are quoted. With corporate bonds, if it says 97.5 it means 97 and 5/8. With government bonds it means 97 and 5/32. What does it mean with muni bonds?


Bond best answer:

Answer by Ron
They are listed as "6% bond, 6.5% basis" which means it has a coupon payment of 6% and yield to maturity of 6.5%.

If it is quoted on price, it is by the 8ths...i.e. 95 and 3/8. Also, when calculating interest, corporate and municipal bonds use 360 day year and government bonds use 365 day year.

Ron, ChFC
Financial Advisor

Bond

Bond Car


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One of an exhibition of cars from James Bond films at the South Bank.

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