All Questions
833 questions
2
votes
1
answer
60
views
Where can I find a benchmark for long-term interest rates in the U.S., given that the Fed primarily sets short-term rates?
I always assumed “interest rates” were set by the Fed across the board, without distinguishing between short- and long-term rates. However, from the top response to a previous question of mine, I ...
- 495
0
votes
0
answers
19
views
Is there a widely accepted approach to decomposing government bond yields across different maturities, and if so, what are the main components?
I'm wondering if there is a standard framework or methodology to decompose government bond yields across various maturities (e.g., short-, medium-, and long-term). Specifically, I’m interested in ...
- 495
3
votes
1
answer
93
views
Does corporate bond coupon has a record date?
I am learning about corporate bond. For example, one has a coupon rate 7% and it is bi-annual (so paid twice a year).
From the internet, the coupon payment date is Tuesday (so two days later). If I ...
- 31
4
votes
3
answers
361
views
What is the best low-risk, short-term(3-month) option to invest 50K?
I currently have $50,000 in cash and am looking for a safe, low-risk place to invest it for a 3-month period. My main priority is to avoid any options that have a risk of losing money, as I want to ...
- 151
0
votes
1
answer
57
views
What does the term Discount Rate mean when it comes to Treasury Bonds?
Recently bought a Treasury bond. The bond comes due at par (100) on 1/14/2025. The settlement day for the trade is 9/17/2024. I paid 98.450025 for the bond. On the trade confirmation it said:
YIELD ...
- 2,022
0
votes
1
answer
112
views
How to collect on a state Farm Fire and Casualty surety bond for 300000
How to collect on a State Farm fire and Casualty Company surety bond
12
votes
2
answers
5k
views
Why does this 4-week Treasury bill that I bought have a 17-week term and a much earlier issue date?
I submitted an order on Fidelity to purchase a newly issued 4-week t-bill. The order went through and I got a t-bill that matures in 4 weeks. However, after looking it up by CUSIP on treasurydirect....
- 125
1
vote
2
answers
85
views
How does it help to make callable bonds floating if not called?
As I understand it, fixed-rate callable bonds are often structured in such a manner that if the bond is not called on its first call date, the bond becomes a floating variable bond.
This, I imagine, ...
- 111
0
votes
1
answer
136
views
Can a retail investor enter into a reverse repo transaction?
Assuming an investor holds $1M worth of treasuries and urgently needs liquidity, can a retail investor enter into a reverse repo agreement through their broker with any of the institutions in an open ...
- 125
1
vote
1
answer
205
views
treasury bond future confusion
I'm not really understand how treasury bond futures work. Take the 10-Year T-Note Futures. Currently, it lists that the June 2024 one is settling for $109,000 (and each T-Note has a face value of $...
- 89
0
votes
1
answer
141
views
Do Treasury Inflation Protected Securities (TIPS) pay variable interest?
My Securities Industry Essentials License Exam Manual from Kaplan says the following:
However, Investopedia says:
As a result, investors receive higher interest or coupon payments as inflation rises....
1
vote
1
answer
169
views
Simple YTM calculation
I'm working the following problem, but getting the wrong answer. Any feedback appreciated.
Suppose you bought a five-year zero-coupon Treasury bond for $800 per
$1000 face value. Assume the yield to ...
- 11
0
votes
2
answers
69
views
How to reconcile bond duration with yield responses in Long-Term vs Short-Term bonds?
I'm struggling to reconcile two aspects of bond behavior in response to interest rate changes:
Longer-term bonds have higher durations, implying greater sensitivity to interest rate changes, which ...
- 495
1
vote
2
answers
130
views
How can I know the historical returns for a Vanguard bond fund, disregarding changes in share price?
This question is really about bond funds in general, but Vanguard funds are what I have experience with, so the details of my question and screenshots will be specific to them. But I hope this ...
- 298
4
votes
2
answers
663
views
Is it feasible for a small retail UK resident to buy UK inflation-linked GILTs directly from the issuer?
I'm interested in buying individual inflation-linked GILTs directly in the primary market (directly from the UK Debt Management Office).
To give some context, I want to do this as I understand the ...
- 1,283
1
vote
1
answer
60
views
1099-int concern, tax filing
My credit union issued me a 1099-int for savings bonds that were cashed in 2023. Is it correct to say that box 3 of the 1099-int be the total of the interest earned plus half the face value of the ...
Holly Dukowitz
3
votes
1
answer
58
views
Where to find the variable interest calculation formula for a bond?
I am a relatively new investor based in Germany and am trying to decide whether to put some money (intended for a house downpayment in 3-4 years) into government bonds. For example this one:
https://...
2
votes
1
answer
1k
views
Is the yield of a 30-year bond, issued 29 years ago and maturing in 1 year, equivalent to that of a 1-year bond maturing on the same date?
The question assumes both bonds are US Treasury bonds.
I'm seeking clarity on whether the difference in original issuance date and remaining time to maturity impacts yield parity between these bonds.
...
- 495
1
vote
1
answer
89
views
Clarification on the 6-Month Yield Point on the US Treasury Yield Curve
Can the 6-month yield point on the US Treasury Yield Curve represent yields from securities originally issued with longer maturities (e.g., 1 year) but now have only 6 months left until maturity?
..Or ...
- 495
-4
votes
2
answers
223
views
Unintentionally bought 10kUSD of I bonds with a few cents: how can I correct my mistake and properly purchase 10kUSD of I bonds?
I bought 10kUSD of I bonds via treasurydirect.gov. The bank account I mistakenly used to purchase the bonds only had a few cents. To my surprise, my account on treasurydirect.gov indicates that the I ...
- 11.5k
0
votes
2
answers
77
views
Bond return in low-rate environments
Assume a simplified world where rates are 0 %, and bonds only carry rate risk (no spread risk, etc).
Let's say I invest in a 10-year bond.
After 1 year has gone by,
if rates have gone up, I've ...
- 1
0
votes
1
answer
157
views
On coupon rate versus yield
I have seen the following roughly spelled out (or else tacitly used) in a few of my finance textbooks and I was hoping for confirmation and, ideally, a proof:
Coupon rate equals APR of yield if and ...
- 121
1
vote
3
answers
145
views
Price for a bond that was issued in the past?
I understand that for US treasury bonds, that the price, its current yield and annual coupon is related by
price = coupon/yield.
But the prices and yields when I look them up online are always denoted ...
- 111
0
votes
1
answer
93
views
What does Takeout and Putup mean?
What does takeout and putup values mean in fixed income trade and how would you interpret these values?
0
votes
2
answers
618
views
Why is bond issue price lower than 100?
I have a question about this bond:
https://markets.businessinsider.com/bonds/braskem_netherlands_fin_bvdl-notes_202323-31_regs-bond-2031-usn15516ah53?miRedirects=1
If you look to the right, you can ...
3
votes
2
answers
124
views
Which of my tax-advantaged accounts should I hold my bond market index funds in?
I have traditional, Roth and SIMPLE IRAs. I'd like to get some total bond market index funds (VBTLX).
In terms of taxes, gains, dividends, etc. is there any difference between holding the fund in a ...
- 345
3
votes
2
answers
241
views
Does the capital gains tax apply this tax year or next if I initiated a sale today but it won't complete until the new year?
I have tried several Google and Stack Exchange searches, and I tried looking through the IRS website, but I haven't found anything that answers my specific question.
I may have made a mistake. Last ...
- 133
3
votes
2
answers
648
views
Why Wouldn't A Bond Issuer Call A Bond When Rates Fall?
See CUSIP 172967AS0, issued by Citigroup in 1998, with a 6.875% coupon and a maturity date in 2098, a 100-year bond. Fidelity says this bond is continuously callable, so why didn't Citigroup call it ...
- 133
1
vote
0
answers
32
views
What are gross concessions on filling 424(b)(2)?
In this filling, for the bond with CUSIP 92346MLS8, the "Gross concession" is 3.150%.
Is this the total fee paid to issue the bond?
Why is it so high for a bond with a fixed 5.3% coupon?
- 111
3
votes
1
answer
962
views
Why does SGOV pay dividends twice in December?
The US ETF SGOV pays dividends once a month from Feb. to Nov, then twice in December. Why? I'm reading it may be for tax reason. If that's correct, what's the tax reason?
From https://seekingalpha....
- 11.5k
1
vote
1
answer
418
views
Can F1 Student Resident Alien Buy From Treasury Direct?
I've been in the United States for 10 Years now on F1 VISA. I've filed taxes and got a SSN 5 years ago. I have a drivers license and an EAD. I'm a resident alien for tax purposes.
Can I open an ...
- 11
3
votes
2
answers
478
views
Yields and prices when consider demand and supply
I know the relationship between price and yield for a simple coupon bond. When the rates go down price goes up. However, when rates go down, I assume bonds are less attractive and as a result the ...
- 565
0
votes
0
answers
41
views
Choosing government bonds of similar maturity to hold to maturity, shall I just go for the highest YTM one
I wanted to buy some government bonds of roughly 3yrs to maturity and planned to hold it to maturity. My bank's app showed 3 bonds of that maturity but one is 0.1 percentage points higher in YTM.
Is ...
- 224
0
votes
1
answer
45
views
Why are these bond portfolio prices equal (case study on 2012 Greek debt restructuring)?
Consider the following case study from Berk and DeMarzo's Corporate Finance.
My question is about the first sentence in the last paragraph:
Assume that participation in the swap was voluntary (as ...
- 121
0
votes
1
answer
211
views
Why doesn't a bond's dirty price account for all coupon payments?
I've been learning about bonds' dirty prices from this video. The dirty price is the clean price plus any money that has theoretically accumulated since the last coupon payment. I'm wondering why the ...
- 47
13
votes
4
answers
3k
views
Why doesn't my bond ETF provide a hedge against stock indexes in the way I thought it would?
I own BND in an attempt to hedge my portfolio against my stock ETF declines, based off of the Bogleheads philosophy. I've noticed that with this ETF, over the relative long term, I've made but modest ...
2
votes
1
answer
92
views
In what cases is it profitable to sell currently-held bonds in favor of buying newly issued bonds?
Assuming there is no arbitrage, and say the Federal Reserve hiked rates from, say, 2% to 3%. I am holding a US treasury bond with a YTM of 2% (before the drop in price due to the rate hike).
If I am ...
- 161
0
votes
2
answers
101
views
Calculating Bond YTM for different maturities
I'm a bit confused on how to calculate the YTM of a bond with less than a full coupon's worth of periods remaining.
If I have a bond with 7 months to maturity with the next coupon payment due in 1 ...
- 1
2
votes
5
answers
1k
views
If loans are sold at discount to other lenders, why isn't the same offer given to the debtor for payoff?
Let’s say I have a loan at 3% for 10years for $100,000. After one year rates in the Loan market rise and are at 6% for the same type of loan. Why wouldn’t the payoff amount of the loan be discounted ...
1
vote
1
answer
178
views
What's the benefit of buying municipal bonds on the secondary market?
"Buy munis!", they say... "they're tax exempt!", they say... but are they? It looks like you're paying income tax on most of the Yield To Maturity (since interest rates have gone ...
- 50.8k
1
vote
1
answer
247
views
Why MBS has lower YTM than treasury bonds?
I just checked, VMBS (Vanguard MBS) has yield of 3.73%, but VGLT (Vanguard government long term bond) has yield of 5.08%. I thought MBS is riskier and would require higher YTM by the market.
- 111
1
vote
1
answer
1k
views
If interest rates remain the same, what effect would this have on long term treasuries?
I'm interested in gambling a few thousand on TMF, a triple-leveraged 20+ year bond fund. It tracks the daily returns of the ICE US Treasury 20+ Year Bond Index.
If the Fed neither raises nor lowers ...
- 47
4
votes
1
answer
766
views
Are there any benefits to purchasing T-bills directly from TreasuryDirect?
I have been purchasing T-bills from TreasuryDirect, but I recently realized that I can also purchase new issue T-bills from Fidelity. The UX is better and when the money is between bond auctions, it ...
- 335
0
votes
2
answers
77
views
What is the probability of each tier of creditor/equity claims being made whole?
In bankruptcy, the broad "tiers" for debt settlement are:
Secured debt (going in order of first lien to second lien and so on)
Priority unsecured debt
General unsecured debt
Preferred ...
- 143
1
vote
1
answer
231
views
Tbill Rollover Interest
I am buying 52 week t-bills with one rollover through Treasury Direct. Being OID interest based, when I reinvest, will I be investing the full maturity t-bill value in my reinvested t-bill or will I ...
2
votes
2
answers
227
views
For this I-bond calculation there's a tiny adjustment to the rate (fixed rate x semiannual inflation rate) it barely changes the rate.Why is it there?
From https://www.treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates/#cerates
Composite rate formula: [Fixed rate + (2 x semiannual inflation rate) + (fixed rate x semiannual inflation ...
- 123
0
votes
1
answer
963
views
Why is anyone buying Japanese bonds given that yield less than 1%?
As per the best data I can find online, Japanese 10yo bonds have a yield of less than 1%, which is lower than yields for US and German bonds. Additionally the yen is experiencing rapid inflation at ...
- 5,922
13
votes
1
answer
6k
views
Why is this T-Mobile bond priced so low?
T-mobile Bond: https://markets.businessinsider.com/bonds/t-mobile_usa_incdl-notes_202020-26_regs-bond-2026-usu88868ag68?miRedirects=1
So the current price is 39.20.
It has a coupon of 1.5%, and will ...
1
vote
1
answer
195
views
Why is the price of a 1 year to maturity bond so high?
I am looking at the 2½% Index-linked Treasury Stock 2024 bond and I can't understand why its price is so high (£377). There is only a year left!
- 565
2
votes
1
answer
1k
views
Do I have to wait until a Treasury Bill auction date to buy a 52-week non-competitive bill, and will reinvesting give me the same rate a year later?
I am considering purchasing through TreasuryDirect, a 52-week Treasury bill which is scheduled for auction Aug. 8th (2023). When can I actually submit my purchase? Should I wait until the latest in ...
- 153