Helpful Terms for Barkley's MUNIS Calculator
The Muni Bond Calculator is a tool for illustrative purposes. It does not constitute investment advice.
Factors such as Federal, State and Local tax rates for income and capital gains/losses should be considered. Also, the shape and movement of the yield curve can have profound impacts on results.
BBI futures index price is the underlying cash index.
Cost of FED funds in cash market refers to Fed Funds. Can input applicable borrowing rate and compare results.
Tax rate on ordinary income refers to the applicable marginal rate.
Average yield of current coupons for actual bonds.
Tax Rate on futures gain refers to applicable marginal tax rate.
Number of days until expiration refers to days to futures expiration, maturity or holding period.
The bottom line is the Calculated Implied Futures Price.
Depending on shape, slope and movement of the yield curve, among other things, the Implied Municipal Bond Futures Price can be at a Premium or at a Discount to the actual underlying Bond Buyer Index (BBI).
In the past, an inverted yield curve coincided with Futures for Munis to be at a premium relative to the spot or cash index of actual Municipal Bonds.
This calculator and others on this site are for illustrative purposes. If you require advanced analytics or programming, Contact Consulting Services today.
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