Questions tagged [bond-coupons]

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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 ...
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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 ...
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Is a CD's coupon a fixed percentage of the invested amount paid upon maturity, or pro-rated? Is the rate annualized?

For a non-callable CD with a maturity of 90 days, would an 8% coupon result in a payment of the invested amount multiplied by 1.02? That is, is the stated coupon rate always an annualized rate, so ...
Tim's user avatar
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Price of Bond with irregular long first coupon period

I'm trying to manually calculate the price of a bond with a long first coupon period, found a few candidate formulas on Microsoft Excel Document: OddFPrice mit.edu: OddFPrice WestClinTech.com: ...
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How to use a coupon bond to purchase a bond?

I have been stomped on this question say I am a US investor and I want to just receive JPY coupon using my US coupon. How do I do this? Is a just a straight exchange of paying fixed US coupon and ...
the_brass_bottle's user avatar
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4 answers
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How to compute the present value of a bond if the coupons aren't reinvested?

We know that the computation of the present value of a bond assumes that the coupons paid are reinvested at the yield rate. But, what if I don't reinvest the coupons? How can I compute the present ...
Chris's user avatar
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Compute coupon of treasuries

How do you compute coupon starting from yield and price? Since yield is coupon / par, which is 2 / 100 in this case, would it just be yield * price, 0.01906 * (102 + 1 / 32) with the data below? ...
asdasd's user avatar
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6 votes
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Can someone explain the short-term pattern between time and bond prices

One of the factors that affect bond prices is time. There is a long term pattern and a short term pattern in this. According to my lecture notes they are: Long-term pattern The price of discount or ...
CountDOOKU's user avatar
8 votes
3 answers
1k views

Are negative coupon bonds possible?

I am aware that negative yield bonds are possible (e.g. by selling a zero coupon bond at a price greater than par value). Are negative coupon bonds possible? I have not found any real-life examples of ...
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Choosing between a deep discount bond and a loan with variable interest rate

I was wondering what kind of a method should be used to choose between a deep discount bond and a loan with variable interest. Since one option has a fixed rate, and the other has a variable interest ...
Heisenberg's user avatar
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Coupon payment intervals in bond names

Consider the name of a bond: "American Telephone & Telegraph Co. Convertible 4½s, due 1933"†. I have some questions about the coupon payment interval information contained in the name: ...
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Given two similar bonds, is the one with a higher yield to maturity (YTM) always a better investment?

Consider two bonds that have the same issuer, seniority, credit rating, and maturity date. My question is about the comparability of their yield to maturity (YTM): if one bond has a higher YTM the ...
Flux's user avatar
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An investor holding an 8% subordinated debenture will receive how much at maturity?

I came across this question in the Wiley Series 7 2020 book: An investor holding an 8% subordinated debenture will receive how much at maturity? a. $1,000 b. $1,080 c. $1,040 d. Depends on the ...
user3553260's user avatar
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How do I find the present value of a bond by discounting each cash flow at a different rate?

Suppose I have a $100 par value bond that pays $6 in coupons semi-anually (i.e. $3 every 6 months). The bond matures in 2 years. There will be a total of 4 cash flows, so the present value calculation ...
Flux's user avatar
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2 votes
1 answer
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Net Bond Coupon/Yield

I just wondered on how one can properly get the Net Bond Yield/Coupon given that you had some "trading" that happened. Suppose, I have a group of bonds (say some Treasury bonds). I acquired a 100 Par ...
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11 votes
2 answers
2k views

Do bonds become more valuable right before a coupon payment?

I'm learning about fixed income for the first time and my understanding is that the value of a bond depends on three major variables: The face value The time to maturity The coupon rate a.k.a. the ...
Paul Razvan Berg's user avatar
3 votes
1 answer
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Calculating the expected return of bonds given a default rate

In The Investor’s Manifesto by William Bernstein, there is an example of calculating the expected return of corporate bonds. It goes like this: Given that 10-year bonds yield an interest coupon of 7 ...
epsylon's user avatar
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Moneyfarm (ETF) and Coupons

I am a beginner, I have possessed public debt bonds only, so far. Recently I decided to differentiate my savings on some form of ETF, specifically on Moneyfarm, just to give it a try. Now, I am trying ...
Pendo Ilari's user avatar
1 vote
1 answer
426 views

Coupon Payment Date

For a bond that pays interest semi-annually, is a must for a coupon payment date to fall on exactly the same day? For instance, if the bond matures in June 30, 2025, the coupon payment dates shall be ...
Thabo Makafane's user avatar
-1 votes
1 answer
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If bond yields fall by 1% across all maturities, which of the following bonds will increase in value the most?

10% coupon bond with 15 years to maturity 5% coupon bond with 15 years to maturity 10% coupon bond with 20 years to maturity 5% coupon bond with 20 years to maturity
Sanderi's user avatar
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Does par value include interest?

Is it only the principal amount, original cost of the bond at the end of maturity date or does it include the whole sum with the interest payments?
Dan's user avatar
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1 answer
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compute the price of a 90-day zero coupon bond with a face value of $100 if the market yield is 6 percent

This is a question from a textbook: compute the price of a 90-day zero coupon bond with a face value of $100 if the market yield is 6 percent Unless indicated otherwise, assume that 1 year = 365 days,...
B Chen's user avatar
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2 votes
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Question Regarding Bond-Coupon Prices with Partial Period Maturity Date

Question: What would you pay for the following bonds assuming an annual yield rate of 7% based on semi-annual compounding (assume face value = $100)? A bond with a coupon rate of 6% maturing in 3 ...
wowdavers's user avatar
1 vote
3 answers
1k views

When short negative yielding bonds, who pays the coupon

Assuming the bond was actually issued with a negative coupon, if you are short (borrowing someone else's bond to sell the bond at a lower price / higher yield) Who pays the coupon? There are at ...
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12 votes
1 answer
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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, ...
public wireless's user avatar
4 votes
5 answers
209 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 ...
Alec's user avatar
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3 votes
2 answers
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Could someone help me understand bond information?

I'm currently looking at this website for information on Government of Canada bonds. I was just wondering if anyone could tell me when the coupon payments are made (is there only one at maturity?) and ...
user3457834's user avatar
4 votes
1 answer
254 views

If a bond has a par value of 1000 and a monthly coupon rate of 3.650%, do I get $36.5 every month until maturity?

I'm looking at bond with CUSIP DSDB66702, which has a monthly coupon rate of 3.650 and a par value of $1000. If I hold this to maturity will I get $36.50 every month before taxes?
Jake's user avatar
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2 answers
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Liquidity of U.S. treasury bonds and moving in and out of them before maturity?

I am curious about the liquidity of U.S. treasury bonds. I always hear about how liquid they are. I like the rates of the 30 year treasury bonds but lets say I don't want to park money for 30 years. ...
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