All Questions
Tagged with bonds bond-coupons
26 questions
12
votes
1
answer
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, ...
- 594
11
votes
2
answers
3k
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 ...
- 1,307
8
votes
3
answers
2k
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 ...
- 17.2k
6
votes
2
answers
466
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 ...
- 334
4
votes
5
answers
214
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 ...
- 211
4
votes
1
answer
267
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?
- 41
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
2
votes
1
answer
220
views
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 ...
- 21
2
votes
1
answer
214
views
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 ...
- 21
1
vote
4
answers
622
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 ...
- 119
1
vote
1
answer
253
views
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 ...
- 133
1
vote
2
answers
134
views
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 ...
- 13
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 ...
- 20.2k
1
vote
2
answers
77
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? ...
- 11
1
vote
2
answers
257
views
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. ...
- 20.2k
1
vote
1
answer
540
views
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: ...
- 11
1
vote
1
answer
83
views
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:
...
- 17.2k
1
vote
1
answer
486
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 ...
0
votes
2
answers
335
views
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 ...
- 17.2k
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
0
votes
1
answer
795
views
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 ...
- 17.2k
0
votes
1
answer
645
views
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?
- 1
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
0
votes
1
answer
53
views
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 ...
0
votes
1
answer
63
views
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 ...
- 125
-1
votes
1
answer
184
views
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
- 19