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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29 views

series EE Bond $50.00 what is it worth now.U.S Saving Bond

What would a $50.00 Series EE Bond be worth now I purchased it in 12/1996?
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Will the Feds pumping 500 billions affect Treasury Bond ETFs?

I was wondering about the question above. I was told that the feds pump the market by buying stocks and bonds which theoretically means that they're going to be investing in bond ETFs. Is my theory ...
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What does TMUBMUSD10Y stand for? (U.S. 10 Year Treasury Note)

MarketWatch, WSJ, and Barrons all list the U.S. 10 Year Treasury Note using the symbol TMUBMUSD10Y. What type of ticker/symbol is this? What does TMUBMUSD10Y stand for?
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What determines the interest rates of government bonds?

It's not clear to me how the interest rate of a specific government bond changes. I would like to make a comparison with cryptocurrency exchanges. Consider, for example, the price of bitcoin on ...
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77 views

Question concerning Investment Grade Bonds

I wish to stick some reserve money in some bonds until current market conditions show signs of improvement. My question is, Bonds like Vanguard VCIT or EDV (examples only), I’m a bit confused with ...
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58 views

Why do bond & treasury yields drop as more people invest in them?

I thought bond and treasury yields were supposed to be stable till maturity date. Yet we often see reports like this: Market upheaval intensified Friday as stocks and oil prices tumbled, while ...
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108 views

Variable Rate Bonds and NQSI

I was looking at a friend's 1099 and I saw the term NSQI. It was for a variable interest rate bond. Am I correct that means non-qualified stated interest? The 1099 showed both the interest the bond ...
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Ought you deposit fixed income in an unregistered taxable account? [duplicate]

I won't replicate the entire thread. Who's correct? GoodEyeGoodEye. 4 points 3 years ago The only bad thing about holding fixed income is that it is one of the worst investments to hold in a ...
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How to calculate YTC

Company A has a 20 year, $1000 face value bond with a 6% coupon interest paid semiannually, the bond currently has a yield to maturity of 5% and its callable in 19 years with a call premium of 1 years ...
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How do I calculate YTM and YTC in the same question

Company A has an outstanding bond with 12 years remaining to maturity, a 6% nominal coupon, semiannual payments, and a $1000 par value. The bond has a 6.50% nominal yield to maturity, but it can be ...
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Is the convertible bond arbitrage strategy really riskless if share price rises a lot?

Convertible bond arbitrage is a position when one goes short the company's stock and long the company's convertible bond. I have found many articles on the Internet stating that this is a riskless ...
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What would happen if Treasury Yields fell below the effective funds rate?

As far as I understand there should not really be an impact because financial instituitons will still be borrowing at the effective federal funds rate. But would there be any other side effects if ...
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Callable and putable bonds

I am trying to synthesize everything I have learned about callable and putable bonds. Is the following information accurate? A callable bond bought at a discount will have yield rate greater than ...
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In what scenario does a safe medium duration bond fund perform well?

I've considered investing in a mid duration(4-5 year) safe (avg. AA rated) bond fund. The only way I can see myself losing some money with such a fund is if inflation picks up. Under what scenarios ...
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Triple A bond fund and interest rate risks

Suppose we have a bond fund with an average rating of triple A and a duration of 5 year. Is it reasonable to use the 5 year government bond yield as the rate affecting the value of the fund via the ...
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174 views

Survivorship bias in Bonds

Bonds have default risk categories like AAA, BBB, etc. Bond funds often choose bonds based on these categories. With ETFs and Mutual funds, there is a level of survivorship bias because the fund is ...
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Yield on Synthetic European Bond Funds

Consider for example, AMUNDI ETF GOVT BOND EUROMTS BROAD INVESTMENT GRADE 10-15 UCITS ETF (C). This is a synthetic Bond ETF for a class of European bonds. Being synthetic, it does not provide ...
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146 views

I don't get the following sentence in The Intelligent Investor book

I'm a newcomer in this "Market thing", and I'm learning from books and videos. I'm currently reading "The Intelligent Investor" and I don't understand the following sentence: In 1925, plowing ...
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227 views

What is the interest rate that the governments bonds move inversely to?

When we talk about "the interest rate" that government bonds move inversely to which is this rate?
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Why do some monthly bond ETFs have no dividend in January?

For example, the following bond ETFs have monthly dividends except in January: 1) https://www.nasdaq.com/market-activity/funds-and-etfs/vteb/dividend-history: ------------...
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87 views

How does an FRN Mutual fund lose money?

Suppose we have disregard the losses in an FRN mutual fund due to credit events. Which are the most harmful scenarios to its value? Lower or higher rates? Bond funds gain in value if rates fall and ...
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99 views

10 year treasury constant maturity rate explained

The 10-year treasury constant maturity rate over 2019 fell from a Max of 2.75 to a Min of 1.50 with an average of 2.15. I want to check whether my understanding of what the figures and the 10-year ...
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If a bond index fund's income is re-invested, how can it be a fixed income asset?

Looking at a bond index fund Key Investor Information, I have found this: Income from the Fund will be reinvested and reflected in the price of shares in the Fund I don't fully understand it. As ...
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Why did US junk bond funds fall from mid 2014 thru early 2016?

The Federal Funds rate was 0% the whole time, and the Prime rate stayed at 3.75%, so it seems that investor fear was the cause. What caused them to be afraid? Here shows how two big junk bond ETFs ...
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How to use Investopia's bond price calculator with redemption values?

When I was a university student, we used to calculate bond price the long way using coupon payment over 1+r and so on. But I'm now trying to do it the fast way using online calculators, such as the ...
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I am struggling to work out this bond formula

What is the price of an annual coupon bond with 10 years to maturity, 8% coupon rate, if yield to maturity is 9%? I can’t seem to work it out right.
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Tax implications of selling a bond vs. holding to maturity

In India, for retail investors, sale of bonds are subject to capital gains whilst holding to maturity (assuming cumulative interest) invites income tax on interest component at marginal rates. Right? ...
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How to compare returns from selling a bond now versus holding it till maturity?

For example, a 10 yr bond (in India) has a coupon of 8%, maturity date of 12-Nov-2020, and Maturity value of INR 10,800. It is trading at 9750 now. How do I compare returns from selling it now versus ...
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In a taxed account, why inimical for capital losses to offset high-than-market distributions?

aughhhhh comments on Efficiently Allocating ETFs to RRSP, TFSA, and a Non-Registered Account? First ask why you want to own bonds. Probably because you want their damping effect during a stock ...
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76 views

Who is the “issuer” of an intra-group term loan?

I've tried googling and looking in financial terminology dictionaries to find an answer to this question but I have been unsuccessful so far. My question is quite simple: who is considered the issuer ...
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What do bond investors do during a sell-off

Suppose there has been some release of data that shows economic slowdown, or increased expectations of inflation. Investors will then sell their bonds in hope of buying newer bonds with higher ...
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59 views

Clarification on definition of Negative Term Spread

I've been trying to educate myself on some financial terms and I've gotten into a point where I'm a little confused. Reading Understanding Term Spreads or Interest Rate Spreads I guess to understand ...
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Clarification about the definition of 'defensive portfolio' in the book 'The Intelligent Investor'

The book 'The Intelligent Investor' defines 'defensive portfolio' as one that holds, at least, 50% of bonds and 50% of stocks, being it more defensive as the proportion of bonds increases. However, (...
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How well do Treasury bond Futures correlate to their hypothetical underlying bond?

How well do Treasury bond Futures correlate to their hypothetical underlying bond? If the price of the future is most tightly related to the current CTD, whose maturity varies widely, how can the ...
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Bonds - Yield to maturity

In bonds, we assume that coupons are reinvested at the same rate as the current yield rate. Where do we go and invest the coupons? Assuming the YTM is 10%, the coupon rate is 10% and the per value ...
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107 views

Does the stock market provide better long term returns than bonds outside the US?

There is an old saying that stock market provides better long term returns than bonds. The example usually cited is always the US stock market which has had a good bull run and has it doubled in ...
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Master thesis : Comparison of green bonds certifications

I am currently thinking about the master thesis I'll need to write in order to obtain my degree. One interesting subject could be the certification of green bonds. Indeed, In order to guarantee ...
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113 views

Why have treasury prices risen despite increasing interest rates since the Great Recession?

ETFs that track treasuries have risen despite the fact that the global economy has stabilized since 2008 and interest rates have risen (from near 0 to ~1.5%) My (very simplistic) understanding of ...
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477 views

Why do rich people prefer shares with dividend over bonds?

I am especially (but not only referring to Warren Buffen, Bill Gates and so on). The first thing that came to my mind is because they can use their voting power, but then Warren started with shares (...
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What does it mean when central banks buy bonds (QE)? [closed]

If I lend money to the government, they issue me a bond with the agreement that they will pay me interest and when the bond matures they will give me back the money I have invested. When central ...
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65 views

Bond - Coupon Payments

How does the periodicity of Coupon Payment affect the YTM of a bond? For example, if I buy a bond that pays 10% Coupon Semi-Annually whose Face Value is 100, and if the same bond pays 10% Annually, ...
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Finding the yield on individual corporate bonds

I'm looking at an individual corporate bond (20341WAD7) with a 8.25 coupon trading at a last price of around 88 cents on the dollar (88/100). By my simple math the yield should be 8.25%/.88 = 9.375%. ...
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Why Can't Some Commercial Bonds Be Bought Through Major Brokers?

I am interested in buying a commercial bond issued by a coal mining company. The CUSIP is 62704PAM5. I searched online at tdameritrade.com and was not able to find the bond using their bond search ...
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Bonds - Yield to maturity change

How can yield to maturity change? For example, if i buy a bond at par value of 100, for a coupon rate of 10% and i hold the bond till maturity. will the yield to maturity remain at 10%? how does YTM ...
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207 views

Balanced index fund that tracks S&P 500

I'm looking in Vanguard some balanced (stocks + bonds) index fund / ETF that tracks the S&P 500 but the only thing I've found is: VFINX: https://investor.vanguard.com/mutual-funds/profile/VFINX ...
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“Holding the trade” in fixed income arbitrage

From TIPS v Treasuries: What a wild ride it was! Receiving 5% on one US Government Bond and paying 2.5% on another US Government Bond with the same maturity is an obvious winner, but many hedge ...
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Buying a bond before coupon?

This is probably going to sound like a dumb question but, say you have bonds with 10% coupon payments and face value we know is 1,000. If the bond is currently trading at 1,400 (a premium to the par ...
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Are Muni REVENUE bonds secured or can the local gov. use the revenues for other purposes not paying the bond holders if its going bankrupt?

Municipal bonds are of two kinds: GO (General Obligation) Bonds or Revenue Bonds. My question on Revenue Bonds is: are the revenues from the specific project secured or can the local government use ...
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307 views

How does this “cont callable,” “make whole calls” bond work?

I was looking at this bond on TD Ameritrade: This is a callable bond, so I'm wondering how that works, exactly. TD Ameritrade says that this bond is "cont callable," which I assume is an ...
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Can a capital loss on a gilt be set against the interest received when tax is calculated?

Say if I buy a 3.75% gilt for £103, with a redemption date 1 year from now, then at the the end of the year I should receive £3.75 interest from coupons, but I lose £3 of capital. The total gain is £0....

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