Municipal Bond Forum
Bond Basics
Q
If I buy a bond, can I sell it before its maturity date? Will I lose any money? If a bond has a coupon rate of 6.125% and WCY of 3.64%, how much interest will I earn?
A
James A. Klotz responds:
Bonds are liquid investments that can be sold any time prior to maturity, without penalty. The price you receive will be based on market conditions at the time of sale.
“Coupon” refers to the fixed rate the bond pays annually until it matures. On a $100,000 investment, you would earn $6,125.00 per year. “WCY” stands for worst-case yield. This is the yield you would receive if the bond was called by the issuer prior to maturity.
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The responses provided in this forum are meant to address specific questions posed by investors about their municipal bonds and to provide market insight for our general audience. Please note, your investments, objectives, results and experience may differ significantly. Our answers and any potential strategies discussed should not be construed as a solicitation to buy nor sell any security or investment product. All investing entails risk.
