Use this tag for questions that relate to debt instruments known as bonds. Generally, money is lent to governments or corporations that is paid back with interest.

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2answers
175 views

Do high interest rates lead to higher bond yields or lower?

Interest rates & bond yields are positively correlated according to this: http://www.investopedia.com/ask/answers/04/031904.asp Thus High interest rates => High bond yields But at the same time, ...
6
votes
2answers
97 views

What does basis point mean?

S&P's schedule of costs mention that getting a rating from them currently costs "6.25 basis points" of the offering. Does this literally mean 6.25%? As in if the bond produced was 100 million in ...
1
vote
1answer
51 views

How do short term treasury bills work?

I'm trying to understand what return I'll get on 1 month treasury bills. I want to invest in something that has minimal risk, minimal management, and flexibility to get my money out. I'm looking at ...
2
votes
3answers
89 views

How to calculate new price for bond if yield increases

I am learning for a class that is partly about finance and I don't have any background in finance at all. I am struggling with a question that was asked in last years exam: A bond trades at £1015, ...
3
votes
1answer
54 views

How to buy US saving bonds if I am not American?

I am not an American citizen, but I hold a social security number because of an H1B visa. I would like to purchase some U.S. saving bonds, but I currently don't live in the U.S. How can I buy those ...
0
votes
1answer
29 views

Interest Rate vs. Annual Percentage Yield (APY) [duplicate]

I'm curious as to what the difference between the Interest Rate and Annual Percentage Yield is. For example: This Bank I was looking at offers 0.45% interest rate on savings account balances over ...
0
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0answers
12 views

How to calculate yield to maturity on Excel

Excel has a function RATE, which seems to work fine if your yield to maturity is an integer. However, in real life, maturity of the most bonds we handles do not have have maturity which exactly 6 ...
0
votes
1answer
73 views

perpetual bond that yields 0%

As far as I understand perpetual bonds are endless and don't mature. So why would anybody invest in one that does not yield? You don't know when/if they are going to pay.
11
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1answer
3k views

200%+ return in 10 years from…bonds?

I read an article this morning about a million dollar bet Warren Buffett made with a hedge fund that would take 10 years to determine the outcome. They didn't each put down a million dollars, rather, ...
4
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3answers
125 views

Why would I buy a bond with a negative yield?

The only reason that I can think of is because I expect the bond to appreciate in price thus offsetting the loss in yield. I could still end up with less money than I started with, if I hold the bond ...
3
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5answers
134 views

Is the need to issue bonds a telltale sign that the company would have a hard time paying coupons?

Background I'm trying to solidify my understanding of bonds, and I have a question regarding something that's probably very basic. Question Say I have a company and I want to issue some bonds in ...
1
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1answer
70 views

Stocks and Bonds in Roth IRA vs non-tax-advantaged

I have an account with Vanguard. I have a Roth IRA, Rollover IRA (from my 401k from a previous job), and I have a standard non-tax-advantaged account. Currently, all 3 accounts are fully Vanguard ...
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1answer
134 views

Bond strategies for a steepening yield curve?

If it is believed that the yield curve is going to steepen very soon, it may be fall in short-term rates, a rise in long-term rates, or some combination of these. What strategy should you pursue in ...
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votes
1answer
111 views

Where to invest, that compounds interest more than annual?

Forgive my ignorance, I found this webpage compounding weekly and noticed the 0.24% 7 day rate. I have heard that there were secure investment vehicles that compounded interest more frequently than ...
22
votes
4answers
4k views

Why would I not buy a bond for less than face value?

The way I understand it is that if you own a bond at maturity you will get the face value of the bond at that time. So if you can purchase a bond at $80 which has a face value of $100 why would I ...
0
votes
0answers
29 views

What is the catch for the wide spread between Noble Bonds and Noble Bonds CDS

What does CDS stand for Noble bond fund info Based on this article, assuming i buy 10 million worth of Noble bonds today which gives me an annual yield 26.4 percent and buy the 5 years CDS at 16 ...
4
votes
3answers
593 views

Investment strategy for retired couple

My parents are retired (71 and 75), their house is paid off, and they have a moderate amount of savings between some IRAs and bank accounts. All of their savings is in cash or money markets, and it ...
0
votes
1answer
43 views

Municipal Bonds and Taxes

A certain investor buys a a Municipal bond for $10,000. He then collects $3000 of tax free interest from the bond and after some time sells the bond for $8000. Does he have a capital loss for tax ...
3
votes
1answer
37 views

Where can end-of-day data be downloaded for corporate bonds? [closed]

I would like to download historical end-of-day prices for corporate bonds. What are some websites for doing so? I do not mind paying for the data but Bloomberg is too expensive, even though it is very ...
3
votes
2answers
40 views

How to read a chart on bond price?

I recently bought some bonds, but don't quite understand the data presented to me. First I will show you two images: SUMMMARY: CHART: The SUMMARY shot shows MARKET COST: 93,300,000 with current ...
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votes
1answer
123 views

Can i know the place where we can buy the stocks and bonds?

What do I need to trade in stocks and bonds.I don't know the actual place where it happens ( is it in banks, or some other place) and I don't know what is the process to hold and sell the stocks.
4
votes
3answers
146 views

Should I replace bonds in a passive investment strategy

In a passive investment portfolio one usually has some sort of mix between stocks and bonds which are supposed to offset losses from each other. I've read that because of low interest rates persisting ...
0
votes
0answers
15 views

What are the yields for European high yield corporate debt as of now and historically?

What are the yields for European high yield corporate debt as of now and historically? I would like to be able to view yield breakdowns by rating (-B, -BB, C and lower) and maturity.
4
votes
1answer
103 views

Why is the bond market tanking? [closed]

Bond spreads have moved up significantly this year, with a sell-off this past week. Some of the underlying factors seem to be well-known in the market for a while. Why the sell-off now?
2
votes
2answers
93 views

Are AAA private-sector corporate bonds safer than government bonds?

Conventional wisdom says that government bonds are the safest investment there is. But the Indian government is rated only one level above junk. Aren't AAA-rated bonds of Indian companies safer? ...
0
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0answers
33 views

Calculate rate of return

If I sell my bond at $982, then reinvest it with market rate of 12% Coupon is $100, face value is 1000, what would be my rate of return my 2nd year? Yield to maturity is 2 years. I've calculated my ...
2
votes
6answers
940 views

Why buy bonds in a no-arbitrage market?

If the bonds rate is the same as market interest rate, why would anybody bother buying bonds instead of just putting money in a bank?
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3answers
116 views

Is it normal that US Treasury bills(0.07%) yield smaller than interest rate(0.25%)?

I assume that under stable economy, US bonds with longer maturities should yield more. However, the current 3 month bill yields 0.07%( 0.23% for 6 months bills), which is below the overnight interest ...
1
vote
1answer
35 views

Can I sell section 54EC infra bonds before maturity?

This question pertains to section 54EC infrastructure bonds that are offered in India — the ones with tax-free dividends (though the principal is taxed). I have invested some money in NHAI and IRFC ...
2
votes
1answer
114 views

If I cash in a U.S. treasury bond before maturity, do I lose out on the difference in face value and purchase value?

I have a 30-year U.S. treasury bond (series EE) that is about 3 years away from maturity. I'm considering cashing it in. However, the purchase value was half the face value. If I cash it in, would I ...
4
votes
1answer
61 views

How/where can a U.S. resident buy recently issued Chinese 3-month Treasury bills?

According to Reuters: China has rolled out a flurry of reforms recently to liberalize its markets and also help the yuan meet the IMF's checklist, including scrapping a ceiling on deposit ...
2
votes
3answers
212 views

Basic understanding of bonds, values, rates and yields

I'm looking for a very simplistic (ELI5) explanation of how bonds work, but I'm not sure I have the basics correct. As I understand it, a bond is basically a IOU or loan. Any company, government or ...
3
votes
1answer
71 views

Does exposure to financials in corporate bond funds make sense?

While examining different corporate bond ETFs, I noticed that many bond funds seem substantially exposed to the finance sector. I see percentages of up to 60% of all positions in financial businesses. ...
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0answers
18 views

What is difference between call date and par call date? [duplicate]

I have question on Bond investing. What is difference between call date and par call date ?
2
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1answer
114 views

Do US Series I Savings Bonds have CUSIPs?

Do Series I Savings Bonds ("I-bonds") have CUSIPs? If so, how can I find the CUSIP for my electronically-purchased I-bonds? The TreasuryDirect website has information about some recent auctions with ...
3
votes
2answers
136 views

Looking into investment bonds for the first time- what do I need to be aware of?

I have an ISA that has matured recently, and am now looking to reinvest that balance elsewhere. Given that most of the ways I usually save (current/ savings accounts, regular savers, ISAs, etc) aren't ...
11
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2answers
3k views

Why don't companies buy back their own (cut-price) debt?

A thought occurred to me today. Glencore's debt is trading at about 70% of face-value. If you're Glencore, what's to stop you buying that debt yourself and pocketing the difference? In particular, ...
0
votes
1answer
51 views

Do buyers of bond ETFs need to pay for accrued interest?

When buying normal bonds, the buyer needs to take note of accrued interest. He should take note whether the price quoted is a clean (excludes accrued interest) or dirty price (includes accrued ...
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0answers
322 views

What is an undervalued or overvalued bond?

Here's a small excerpt from Bond Valuation section on Investopedia: Determining Whether a Bond Is Under or Over Valued What you need to be able to do is value a bond like we have done before ...
2
votes
3answers
89 views

Are junk bonds advisable to be inside a bond portfolio that has the objective of generating stable income for a retiree?

Suppose a person has retired. He would like to construct a bond portfolio that generates stable income for his remaining days. Is it advisable to include junk bonds in the bond portfolio for that ...
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2answers
86 views

Dividend yeild per unit

I have been reading the intelligent investor, on chapter 4 page 91 Graham goes on to say.. While our proposed 50–50 division is undoubtedly the simplest “all-purpose program” devisable, it may ...
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vote
3answers
78 views

Does an owner of a bond etf get an income even if he sells before the day of distribution?

Suppose an investor owns a bond ETF for 1 month and sells without waiting for the date of income distribution, will he still get paid an income for owning the bond ETF for 1 month? This does not work ...
2
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0answers
33 views

Are foreigners who buy UK ETFs subjected to a withholding tax?

Currently, when a foreigner buys U.S ETFs, the dividends or income (in the case of bond ETF) will be taxed at 30%. Suppose a foreigner, say an American or Singaporean, buys a UK bond ETF. Is there a ...
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1answer
172 views

Formula to compute 10 year US governement bond price given yield

What is the formula to convert US govy 10 year yields (as those shown here) in to bond prices? I know in general the math looks like this but I don't know what the values of the variables are for a ...
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3answers
74 views

Does the P/E ratio not apply to bond ETFs?

I cannot seem to find them on any website, but I have seen their existence for stock ETFs. If the answer to the question entitled is 'no', then why not? I exemplify with 2 ETFs: Blackrock (Canada)'s ...
0
votes
1answer
124 views

Helping my family sell their oil stocks. What to buy? [closed]

sorry I'm a bit new to the investing world. I am familiar with most topic from my business minor. My family has a lot of their retirement in oil company stock. (I know, diversify.. they don't know) ...
0
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4answers
120 views

Why should investors care about the interest rate risk, if they only care about the money they have at retirement?

I understand the concept of the interest rate risk (bonds lose value as the discount rate increases). However, if an investor only cares about how much money he will have at retirement and he wants a ...
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3answers
366 views

What are some good books for learning stocks, bonds, derivatives e.t.c for beginner with a math background?

Despite being STEM person, I always wanted to learn how stock & financial markets work. I always wanted to know how those stocks work, what are those bonds e.t.c. The only struggle I am having, ...
4
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1answer
214 views

Given current market conditions, how / when should I invest a $200k inheritance?

Situation: I have $100k in an IRA with Betterment, plus just inherited $200k - currently cash. I'm 34 years old and salary is $97k, with no debt. Goals: IRA: growth of principle for retirement ...
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1answer
50 views

Are bond ETFs considered low risk in this market?

I'm thinking about moving my money to an automated management service. I've set my risk profile to 3.5 (low) which means they would invest around 35% in bond ETFs. With today's interest rates being ...