In corporate or municipal bond pricing, how much is one price point worth?

Study for the Series 65 Exam. Enhance your knowledge with flashcards and multiple choice questions, each supplemented with hints and explanations. Prepare effectively and get confident about your upcoming exam!

Multiple Choice

In corporate or municipal bond pricing, how much is one price point worth?

Explanation:
Prices are quoted in points, and one point equals 1% of the bond’s par value. For most corporate and municipal bonds, the par is $1,000, so one price point is $10. That means a quote of, say, 97.50 is $975 per $1,000 par, and a one-point change moves the price by $10 per bond. If the par were a different amount, the dollar value per point would scale accordingly (e.g., $5,000 par would be $50 per point).

Prices are quoted in points, and one point equals 1% of the bond’s par value. For most corporate and municipal bonds, the par is $1,000, so one price point is $10. That means a quote of, say, 97.50 is $975 per $1,000 par, and a one-point change moves the price by $10 per bond. If the par were a different amount, the dollar value per point would scale accordingly (e.g., $5,000 par would be $50 per point).

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy