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.

Filter by
Sorted by
Tagged with
1 vote
0 answers
20 views

Need help understanding bond yield outliers

I was looking at bond yields on Fidelity and noticed a few outliers. The tables below show the 'Highest' and 'Median' yields. Note the outliers - Agency/GSE 10yr and Corp AAA 2yr - where the highest ...
user avatar
  • 111
2 votes
0 answers
93 views

Does a "collective" safe haven ETF exist? (e.g. a mix of gold, bonds etc...) [closed]

In this period of bear market I would like to invest in some safe haven assets, like gold or diamonds for example. I was wondering if there is an ETF that tracks the price of a group of these assets, ...
user avatar
  • 29
0 votes
1 answer
78 views

What is the rate of return for the investor who purchased the bonds?

Company X issued 30 year bonds with 10% annual coupon rate at their par value of $1000 in 2010. The bond has a 7% call premium. Today Company X called the bonds. I am confused as to how to calculate ...
user avatar
  • 1
1 vote
1 answer
57 views

When bonds 'rally' what component is rising? Bond prices? Current yields? Nominal yields? Yield-to-Maturity?

As the question says, what should we infer is happening when it's reported that the bond market is surging or rallying? Is the implication that bond prices are increasing? Or is that yields are ...
user avatar
5 votes
6 answers
3k views

Does buying and selling of bonds affect market price of bonds?

So I'm looking at this page: https://www.accountingtools.com/articles/how-to-calculate-the-issue-price-of-a-bond.html and I had a doubt. When lots of people start buying a stock for whatever reason (...
user avatar
1 vote
0 answers
23 views

What is the unhedged version of VBU?

I know I should be able to find this, but I don’t see it listed anywhere online. I want to find the Canadian version of Vanguard’s total US Bond index (BND), I see VBU but this is hedged against the ...
user avatar
  • 2,542
0 votes
0 answers
35 views

How do interest rates affect bond coupon rates?

Let's say interest rates are at 2% and I buy a 10-yr bond with a face value of $1,000 and coupon of $50. The coupon rate will be $50/$1,000 = 5%. Then, let's say that one year later interest rates ...
user avatar
2 votes
1 answer
100 views

Why are long term bonds subjected to a higher volatility, as well as higher yield than short term bonds?

Why are long term bonds subjected to a higher volatility, as well as higher yield than short term bonds? (Assuming normal yield curve). Say, I have 2 investment options and my investment horizon is 2 ...
user avatar
  • 21
3 votes
1 answer
173 views

Why is there a sell off of US bonds if interest rates in the US are currently rising?

My understanding is that as interest rates go up, the yield offered by bonds also increases (in response). If the yield of bond increases, then why are people selling bonds?
user avatar
0 votes
1 answer
54 views

Market risk for TIPs vs. I Bonds

Treasury Direct has a good comparison between TIPs and I Bonds: https://www.treasurydirect.gov/indiv/products/prod_tipsvsibonds.htm However, I want to make sure I understand when you can lose ...
user avatar
4 votes
1 answer
859 views

How to buy bond index funds only when they are mostly composed by higher interest rate (%) bonds

Vanguard states that their index funds are re-balanced every 4 months or when the management (exceptionally) considers it necessary. I imagine the FED raising rates several times during 2022 and 2023 ...
user avatar
  • 1,189
0 votes
1 answer
41 views

Hypothetical - Optimal fixed income portfolio for Volcker period

Paul Volcker raised the interest rate to over 20% in the early 80s. I was thinking to myself, if I had to manage my finances during such a time, how would I do. According to Investopedia, bonds have ...
user avatar
0 votes
0 answers
51 views

Direct Registration System (DRS) & U.S. Bonds/U.S. T-Bills?

Is the Direct Registration System (DRS) designed for shares only? Can any other financial instruments be used with that system? For example, the corporate bonds of Apple Inc. (AAPL)? Or U.S. Treasury ...
user avatar
1 vote
0 answers
62 views

How do I calculate I-Bond growth?

I'm looking into purchasing $10,000 of Series I Savings Bonds every year. I'm trying to understand what the formula is for their growth. I looked at bond calculators, but to be honest, I'm not very ...
user avatar
0 votes
1 answer
41 views

Treasury shorts, liquity and yields

This article describes the relationship between treasuries shorts and treasuries market liqudity and yields: With short positions anticipating higher yields elevated and continuing to grow, liquidity ...
user avatar
0 votes
0 answers
18 views

Treasury market liquidity derivation

This article discusses T-bill market liquidity/depth: Market depth -- derived from the sizes of the top three bids and offers on the BrokerTec trading system between 8:30 a.m. and 10:30 a.m. in New ...
user avatar
0 votes
1 answer
40 views

What does it mean that UST10 have risen from 1.2 to greater than 1.7 over the last half year?

I'm a newbe in bonds market, but I'd like to ask what does it indicate that UST10 have risen from 1.2 to greater than 1.7 over the last half year? Does it mean that the bond market foresees high ...
user avatar
  • 165
0 votes
0 answers
35 views

Is this calculation of the Value and Price of the forward contract correct?

Let us consider a long forward contract on a 5 year bond which is currently traded at a price of 900 EUR. The delivery price is 920 EUR, the time to maturity of the forward contract is two years. The ...
user avatar
21 votes
5 answers
4k views

When can you skip bonds for retirement?

Conventional wisdom holds that as one approaches retirement, one should transition from holding mostly risky investments (stocks and mutual funds) towards holding more conservative investments (bonds)....
user avatar
  • 1,152
0 votes
2 answers
63 views

Why do raising short-term yields indicate that the economy is about to enter a recession?

Below is the excerpt from the article Term Structure Of Interest Rates Downward sloping — short-term yields are higher than long-term yields. Dubbed as an "inverted" yield curve and ...
user avatar
  • 165
1 vote
1 answer
60 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 ...
user avatar
1 vote
1 answer
101 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 ...
user avatar
  • 45
0 votes
1 answer
98 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 ...
user avatar
  • 14.8k
0 votes
0 answers
29 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 ...
user avatar
0 votes
2 answers
75 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 ...
user avatar
1 vote
1 answer
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 ...
user avatar
0 votes
1 answer
62 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 ...
user avatar
2 votes
3 answers
203 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 ...
user avatar
  • 431
0 votes
2 answers
88 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 ...
user avatar
  • 303
5 votes
6 answers
726 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 ...
user avatar
  • 1,262
-2 votes
1 answer
86 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 ...
user avatar
  • 1
1 vote
1 answer
108 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 ...
user avatar
  • 303
0 votes
1 answer
91 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 ...
user avatar
  • 303
0 votes
1 answer
65 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 ...
user avatar
2 votes
3 answers
135 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 ...
user avatar
  • 121
1 vote
1 answer
108 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) ?
user avatar
  • 837
1 vote
1 answer
62 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?
user avatar
  • 837
0 votes
1 answer
106 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 ...
user avatar
  • 837
2 votes
1 answer
69 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 ...
user avatar
  • 837
0 votes
1 answer
56 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 ...
user avatar
  • 837
-2 votes
1 answer
109 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.....
user avatar
  • 837
2 votes
2 answers
62 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 ...
user avatar
  • 837
1 vote
3 answers
148 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 ...
user avatar
  • 113
1 vote
0 answers
50 views

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. ...
user avatar
  • 213
1 vote
1 answer
92 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 ...
user avatar
  • 65
1 vote
0 answers
63 views

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 ?
user avatar
  • 837
0 votes
2 answers
71 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? ...
user avatar
  • 1
0 votes
1 answer
105 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 ...
user avatar
  • 119
1 vote
2 answers
169 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 ...
user avatar
6 votes
2 answers
414 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 ...
user avatar

1
2 3 4 5
15