Municipal Bond Forum
How prices are listed
Q
I was just looking at your unit trusts listing and I’m a little confused. When the bond price is $102, as an example, 15 units should cost 15 times $102 or $1530. Your site shows $15,300. That means the bonds are selling for $1020 per unit instead of $102. Can you please show me where I am miscalculating the cost?
A
James A. Klotz responds:
The listing you are referring to is for individual municipal bonds, not unit trusts.
Although it can be somewhat confusing, you seem to have a handle on how
the prices work.
Tax-free bonds are quoted in “points” not dollars. To arrive at the price in dollars, simply move the decimal point one place to the right as you did, 102.00 becomes $1,020.00 per thousand dollars in face amount. As you deduced, 15,000 in face amount would cost $15,300.
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