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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How does a typical bond ETF provide tax information to the investor in Canada?

Before deciding whether to use registered or unregistered (taxable in Canada) account, I'd like to understand the complexity of tax reporting as a result of holding bond ETF, for example BMO ZFL (long ...
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88 views

Are foreigners who buy UK ETFs subjected to a withholding tax?

Currently, when a foreigner buys U.S ETFs, the dividends or income (in the case of bond ETF) will be taxed at 30%. Suppose a foreigner, say an American or Singaporean, buys a UK bond ETF. Is there a ...
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36 views

How can I gain exposure to long term treasuries across the entire globe?

A "Long-Term Treasury" fund typically holds US government debt with a long expiration date, for example, 20 to 30 years in the future. It is frequently cited as a useful portfolio component ...
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68 views

Are Credit Default Swaps an adequate hedge for leveraged bond portfolio?

A hedge is supposed to be a cheaper bet that pays off if a primary bet isn't profitable. With a leveraged bond portfolio, my understanding is that a credit default swap (CDS) can help hedge, but I'm ...
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145 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 ...
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227 views

Are bonds taxed every year or only at maturity

If I buy a bond that matures in 2 years, do i pay taxes only when i get my principal and interest back at maturity? Or do i pay some taxes on year1 and rest on year2?
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2k views

How do you use the formula for YTM when the compounding is semi-annual?

How do I calculate yield-to-maturity (YTM) with a simple handheld calculator? do we multiply n by 2?
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1answer
52 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 ...
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42 views

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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53 views

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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158 views

How to interpret negative bond yield quote

I am trying to understand investing in (non-us) government bonds. Looking at data I can find online regarding the bonds available in my broker is giving me information I can't make sense of. For ...
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34 views

Computing risk-neutral probability of spot rates

I am trying to use a binomial model to price options wtih bonds as the underlying security.If the current term structure is flat at 6%, but next year, I assume the one-year spot rate will be either 5% ...
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69 views

confusing returns from bonds

New to bond investment and seek clarification - On Charles Schwab Bond Source chart for fixed income offerings, the followings are listed CD 1yr: 2.6 Muni (AAA) 1yr: 2.71 I assume it meant annual ...
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38 views

Buy shares and bonds in non citizens countries

I am from Sri Lanka and I invested in stock market and bond in Sri Lanka. But I really like to buy other countries shares and bonds. Is it possible to buy those thing without citizenship. I know ...
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1answer
245 views

Correct interpretation of side-by-side graphs of intra-day fluctuations of stocks and bonds

At the end of the day on Tuesday, February 6, 2018, a snapshot of the Dow and 10 year Treasuries was as below: At the dip of the stock market on Tuesday, there was also a dip in the yield of the 10-...
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423 views

Early tender offer is less than the current value of the bond. What is the benefit?

I received an early tender notice for a bond I hold: Terms: $815.00 per $1000 P.A. plus int. In addition, holders who tender their notes prior or on 08/25/16 (The Early Tender Date) are ...
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1answer
32 views

Bond price in crises

How do bond prices fall in a crisis as of course credit spreads will go up generally but also interest rates plummet meaning surely the bond price rises at the same time? Does this effect cancel out ...
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Where can I find quotes for over-the-counter bonds traded in Singapore?

In the US, over-the-counter secondary market bond trades are reported in the Trade Reporting and Compliance Engine (TRACE). Is there a similar system in Singapore where I can view historical trades of ...
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34 views

Is this definition of duration incorrect on Investopedia?

"Duration is the weighted average of the present value of coupon payments and principal repayment." (see 1st sentence of 4th paragraph of text) https://www.investopedia.com/terms/c/convexity-...
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87 views

What would happen to a typical investment portfolio if the dollar collapses?

Let's say I have an investment portfolio with diversified US stocks and diversified US bonds. How would a dollar collapse affect this portfolio? And which component of the portfolio is less likely ...
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25 views

Why is my series EE bond's next accrual date not a multiple of 6 months after the issue date

My grandparents gave me a few Series EE bonds while I was growing up. I have entered their serial numbers/issue dates into this calculator on treasurydirect.gov. Most of the bonds' issue date was in ...
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38 views

Exercise on how to value a bond

I'm a computer science student and in the current semester I wanted to participate at a "Project and Enterprise" financing course. The problem is that due to corona, normal lectures are not possible ...
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2answers
132 views

Why should I buy a principal protected note from the bank when I can create one on my own?

I was looking at principal protected notes (PPN) at a bank (link: CIBC Principal Protected Notes). It says: The return of your CIBC PPN depends on the performance of the underlying assets. (It ...
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1answer
69 views

Is there anyway to workout this IRR with pen and paper or do I need a computer?

For the following question (part a), do I need a computer to calculate this IRR or can it be done via pen and paper? I have found the sale price at Y10 to be $78.81 and looking at the IRR as the ...
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27 views

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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18 views

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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28 views

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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1answer
45 views

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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29 views

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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95 views

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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55 views

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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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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123 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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97 views

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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2answers
54 views

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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45 views

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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61 views

Bond ETFs slowing down after 2015. - why?

I see a lot of bond ETFs have very low gain, or even stay flat during 2015. - today. For example Eurozone Government Bond or US Treasuries. What is the reason for this?
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81 views

How do I solve this exercise with bond and probabilities?

I have a bond with coupon rate 10% and annual coupon payments with maturity 3 years, face value 1000 and yield to maturity 8%. The bond pays the first coupon with 20% probability and nothing with 80% ...
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1answer
143 views

How should I interpret information about bond spreads that narrowed or widened the most?

How should I interpret information about bond spreads that narrowed or widened the most? I see this information in the financial pages in the newspaper, and have some ideas about what it means, but ...
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1answer
101 views

Common diversification strategy for bond investment?

What is the most common diversification strategy for bond investment for a long term investor? long vs. intermediate vs short term inflation protected (TIPS) US vs world government vs corporate etc. ...