Questions tagged [bonds]

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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46 views

What is the "Stock/Equity Ratio"?

I'm reading the Intelligent Investor and I found this: Stock/Equity Ratio. This is the ratio of the market price of the junior stock issues* to the total face amount of the debt, or the debt plus ...
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51 views

What is Best bond to hold during the bull market and why? and bear? [closed]

What is Best bond to hold during the bull market and why? and bear?
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32 views

Difference between Macaulay duration and modified duration?

I'm studying finance and am struggling to find the difference between the macaulay duration and the modified duration? I believe the Macaulay duration is the effective time a bond is due to be repaid ...
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1answer
90 views

Why are bond ratings more prominent than stock ratings?

Why do people care more about bond ratings than stock ratings (if they even exist at all)? For example, there are many bond funds that say they will only hold investment-grade bonds (typically higher ...
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28 views

Why are there so many money market yield measurements? (MMY, BEY, BDY) Are all of them really used?

I have heard teachers online explain that since these measures do not account for compounding they are "naive" and are "rough estimates" since they have such a short maturity that ...
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2answers
72 views

Don't lower rates make bond prices rise? -- question from The Intelligent Investor

There is a passage from The Intelligent Investor that I'm trying to understand. It talks about companies refinancing high-grade bonds at more favorable rates for them. My question is about the bold ...
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1answer
63 views

What is "the index-linked variety"?

I am reading this article on The Economist. It says that the new generation will gather lower returns on investments than the previous generations. The authors estimated the future return on equities ...
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1answer
49 views

Gain/Loss on Bonds (Fidelity)

I have bought a series of corporate bonds on Fidelity and sold a couple of them after a month. I wondered the best way to measure how much money I made, given how complicated bonds can be. I know ...
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3answers
185 views

In theory, what effect should an increase in the national interest rate have on corporate bonds?

The Bank of England is soon to announce if it's going to put its interest rate up or not. I own a lot of UK corporate bonds. Specifically, I have a big investment in one of those unit trusts that ...
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63 views

When direct bonds investment is better than investment in debt funds?

Some good company (say SBI) bonds have coupon rate of 9%. Q1. Does this imply that we can better invest in such bonds instead of debt funds (which have < 9% returns)? Or should I rephrase: why ...
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697 views

Questions on a 60/40 portfolio outperforming stocks over the last 20 years

My question is based on a particular segment of a show on YouTube. Segment starts at 19:42 (linked) and ends around the 25-ish minute mark. (It's the Money Guy Show if you're curious.) I was surprised ...
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1answer
51 views

A foreign exchange reserves

A foreign exchange reserves manager is indifferent between placing a deposit in a foreign bank account or paying $98 to purchase a $100 zero issued by an advanced country government that matures in ...
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47 views

Understanding how bond prices change

I came across following statement regarding Indian debt funds in ValueResearch ebook: The RBI announced retracting ₹2 lakh crore of banking funds through a 14-day reverse-repo operation in January ...
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39 views

How we earn from debt funds?

I was guessing how we earn from debt funds. I know the underlying bonds pay back interest. But I want to know how exactly we earn from debt funds. I know how NAV of the fund increases in decreasing ...
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61 views

Are creditors and bondholders the same thing?

I read the following passages on investopedia: "Every company has a hierarchical structure of rights for the three main classes of securities that companies issue: bonds, preferred stock, and ...
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3answers
115 views

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 ...
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1answer
107 views

Would I lose principal if I bought a 2% 1-Year Bill for $103.0?

Would I lose principal if I bought a 2% 1-Year US Bill for $103.0 (1000 + 20 - 1030 = -10) ?
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1answer
56 views

Can I place limit orders (like limit, stoplimit, trailstop..) in bonds (treasury bonds, municipal and other types of bonds)?

Can I place sell limit orders (like limit, stoplimit, trailstop..) in US bonds (treasury bonds, municipal and other types of bonds)? or it is only market orders?
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103 views

Why would anyone buy an old treasury while it is regularly auctioned during the year?

Why would anyone buy an old treasury while the same treasury (for example 5 year note, two years note) is regularly auctioned during the year? I mean if the yield rise why to buy an older note ...
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1answer
58 views

Are there market makers in bonds market?

When I order to mkt buy/sell stocks in US primary markets it excuted in seconds. In bonds markets, especialy in US treasuries, if I order to sell my bond or to buy an old bond, could my mkt order last ...
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52 views

Does the retail investors buy treasuries for trading as main purpose?

The yields for treasuries are very low, it is not logic to hold a treasury for 30 years to get two percent every year, I'm a beginner so I wonder if buy bonds/notes and waiting the yield to fall and ...
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108 views

If I bought one treasury bond for 100.0 ($1000), then its market price become 110.0, does my profit be $100?

If I bought one treasury bond for 100.0 ($1000), then its market price become 110.0, if I sold it, does my profit will be $100? and does all other bonds' profits (municipal, corporate, international.....
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2answers
59 views

When the 5-Year Treasury Note's yield is up 10%, Which note exactly do they refer to?

The 5-year Treasury notes, for example, are issued multiple times during the year, everyone have its cusip number, when they say this note yield is up by 10%. Do they refer to the most recently ...
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3answers
138 views

Why bond ETF price rises over time?

I get that bond price can change depending on the current interest rate (since interest rate of the bond doesn't change). But if this were the only factor, price of the bond ETFs (like BND) would stay ...
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Can the Federal Reserve permanently decrease money supply? [closed]

As far as I understand it, the primary way the Federal Reserve decreases the money supply is to sell bonds. The entities buying these bonds give up their cash for them and thus M0 is decreased. ...
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1answer
82 views

How to discriminate among all the tickers associated with a single company?

While following Interactive Brokers (IBKR Mobile) Tutorial | From Zero to Hero on my iPhone, I noticed there are many options linked to a company. In the screenshot we see, looking for Tesla will give ...
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What does the bond issuer/company do when the bond is oversubscribed?

I'm a beginner, I see sometimes in news that a company issue bonds (1 million total issuance), but they received 3 million requests, what will they do with the two million excess ?
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69 views

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? ...
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1answer
85 views

How to invest in El Salvador bonds via fidelity

El Salvador bonds have gone down lately and I would like to invest in them. I use Fidelity to manage my 401k investment fund, but I can't find any symbol to invest in related to El Salvador bonds. Is ...
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158 views

Can a company rent stock shares instead of selling them?

I'm beginner in stocks. I know that public companies can sell their stock shares, but what about renting them for a period of time and getting them back? Are there any certain examples that a company ...
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400 views

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 ...
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28 views

What is a "Broker's Broker Trade" in the US municipal bond market?

I was looking at the historical trades of a municipal bond using the Municipal Securities Rulemaking Board (MSRB) Electronic Municipal Market Access (EMMA) website: Notice that the first row in the ...
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108 views

How often does the treasury department issue bonds and at what prices?

How often does the u.s treasury department issue bonds and at what prices? Does it issue bonds throughout the year with the same annual yield regardless of current bond prices in the bond market, as ...
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2answers
171 views

How can treasury bond ETF increase its value when the FED raises interest rates?

The theory about bonds say that when the interest rates raise, bonds value falls since today's bonds have a higher yield than yesterday's bonds. However, let's take the 2018-2019 period. The FED ...
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1answer
192 views

Why would someone want to sell a bond for 50% less than what they paid?

I was looking on DeGiro and I saw some corporate bonds up for sale for very low amounts e.g. 34.11 and 52.00. Since the standard or baseline amount is 100.00 these bonds seem to be up for sale for 520 ...
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1answer
43 views

How can I interpret this bond chart?

I am looking into buying a bond on DeGiro. I am new to this platform and to buying bonds. From what I understand, bonds are usually issued in multiples of 1k and have a coupon rate that is paid to you ...
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45 views

How do I hedge currencies when buying foreign bonds?

The majority of my income and savings are in Singapore dollars (SGD). For practical purposes, this is my "base currency". When buying foreign bonds and bond funds denominated in foreign ...
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1answer
2k views

Do x-year treasuries become y-year treasuries (x-y) years later?

My understanding is that treasuries can be bought and sold (which is what causes their changing interest rate because of their changing price). Since they aren't static/locked assets, does that mean ...
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1answer
122 views

Are U.S government bonds completely liquid?

In the event of a market downturn like 2008, could I liquidate them whenever I wanted to at good price on a retail stock broker?
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139 views

Calculating the cost basis on a tax free Zero Coupon Bond

A tax free zero coupon bond is issued with a yield to maturity of 3.5%. After some time, an investor buys the bond at 50. ( 50 cents on the dollar ). When he buys the bond, the bond has a yield to ...
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2k views

Do bond funds have an inherent advantage over individual bonds within a portfolio?

Background: I am constructing a simple ETF portfolio consisting of 70% stocks and 30% bonds. Every three months, I will add money into the portfolio, and rebalance the portfolio to restore its 70/30 ...
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63 views

When inflation occurs, why do bonds no longer get cheaper as they sell off? [closed]

I thought that inflation drove down bond prices in general, but I read in "The Invisible Hands" by Steven Drobny that it is only when inflation rises that government financing becomes a ...
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32 views

Are treasury bond yields pegged to economic growth?

Does the Fed factor in economic growth when determining the yields on bonds?
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48 views

Question about the premium from selling bonds

Suppose I bought a $1000 ten-year treasury note (2031) with 4% yield. After one year, the yield decreased to 1%. If I sell it, how much premium will I get? Will I get (3% * 1000)? If the calculation ...
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99 views

How can I benefit as an individual investor in bonds, from increasing of bond yield?

I'm a beginner, What do I benefit as an individual investor in bonds, from bond yields increasing ? If I bought a 10 years treasury bond at the beginning of this year with a yield of 1 and then it ...
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1answer
55 views

How can I find the price (not just the yield) of a treasury bond? [closed]

Sorry if this is a dumb question, but whenever I want to look up the US treasury bond, I can only find the historical chart for its yield. But how could I find its historical price ($1183.28 as in the ...
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2answers
128 views

How can a bond fund have a higher current yield than the bonds it contains?

I'm looking for a place to park funds for a 1-3 year period, which rules out stocks. I found SFHY, a short term corporate bond fund, which has a current quoted yield of 4.33% and a "YTD Daily ...
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43 views

Positive movement vs negative movement of bond market yield

In the example on this page, a yield was issued at a yield of 7.18% at the beginning of a year and was forecasted to have a yield of 6.8% at the end of a year. The resulting value gain from the ...
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44 views

Given one ticker, how can I receive the ISIN for it? [duplicate]

I recently discovered the investpy library and I would like to know if there is any function where I can pass the stocks code and on return, among other data, receive its ISIN. I'm trying the function ...
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69 views

Impact of rising interest rates on default risk of existing junk bonds?

When interest rates rise, we all know that Math shows that the value of a bond will drop, but that's not my question. Intuition says that there's an indirect risk, in that rising rates might hurt ...

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