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Questions tagged [government-bonds]

for questions that relate to government bonds. It is recommend you use a country tag or state what country you are referring to. A government bond is a bond issued by a national government, generally promising to pay a certain amount on a certain date, as well as periodic interest payments.

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How does the price of a long term treasury bond effect the value of your investment?

The most important thing to point out about bonds is their interest rate and face value fluctuate like a see-saw, when interest rates are high the face value is lower, when the face value is high the ...
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Understanding bond ETFs

I am failing to understand the bond ETFs. I somewhat understand stock ETFs: ETFs own stocks, I buy a part of ETF, therefore, I also indirectly own stocks. When I sell my share of ETF, the ETF gets ...
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Treasury bond yield

I am trying to learn about valuation and yields for treasury bonds. For the Treasury Bond maturing on 11/15/2018, initially sold in 1988 with a 9% coupon, it states that the yield to maturity is 1.66%....
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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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Why invest in long term government bonds when the yield curve is inverting?

The New York Times has noted that the US is heading toward an inverted yield curve, which is one of the precursors for a recession. The yield curve is said to be inverted when long term government ...
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Which particular 10-year note does the daily 10-year treasury note yield refer to?

Question might be a bit obscure. The yield of the 10-year treasury note is reported daily on TV and in the papers. Since there are notes with different maturities in circulation, also more importantly,...
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Easy ways to hedge against debt overleverage and potential inflation as a personal economic agent

Every prediction is correct... at some point in the future. However, there are economical indicators that would be considered teaching points if a financial crisis were to occur at any point in the ...
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Asset Allocation, Risk Free Part with Negative Yielding Bonds

I read a few books about asset allocation, e.g. Bernsteins's Asset Allocation states that mixing bonds with stocks lowers the risk significantly but only decreases the profit slightly. So there is a ...
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Why are some medium term UK government bond (gilt) prices seemingly so disparate?

Looking at UK government bond prices and picking out one example of what I mean: Coupon Maturity Trading price Treasury 8% 2021 8 07-Jun-21 123.08 Treasury 4,3/4% ...
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How bidders determine price for T-bills?

Let's take for example 4 week T-bill issued today, 3/1/2018 (https://www.treasurydirect.gov/instit/annceresult/press/preanre/2018/R_20180227_1.pdf). Price of t-bill is determined on auction by ...
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172 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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Are T-Bills “coupon equivalent” rates based in annual terms?

According to treasury.gov, the "coupon equivalent" for a 1 month (4 weeks) T-Bill issued today is 0.99%. I happened to have purchased a 1 month T-Bill today for $99.9246. By my calculation that ...
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395 views

Understanding bond margin, carry trade fundamentals

US Treasuries that have less than 6 months till maturity allow for 100x leverage, as the regulatory requirement is to put 1% of the market value down for each bond. So a $1,000,000 account could hold ...
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What causes US Treasury I bond fixed interest to increase? [closed]

I've been reading about Series I Savings Bonds on treasury direct. It seems that the return on an investment is given by the composite rate which is given by the formula: Composite rate = [fixed rate ...
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Yield curves and Bonds

Just struggling with putting the two together and google seems to be failing me. (1) Are the yields on yield curves annual continuously compounded rates, effective rates or something else like a "...
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383 views

What happens when I buy Continuously-Callable bonds

I am looking at this bond: ILLINOIS ST GO 5% 04/01/2028 Callable (452152K59) Continuously-Callable on 07/04/2017 @ 100.00000 The price of this bond right now is $100.05000 (YTM=4.993%). In ...
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Bond ETFs as a means to achieve risk parity

Background One of the investors that I really look up to is Ray Dalio. He has stated that a 50/50 stock to bonds allocation does not acheive risk parity because 80% of your risk is still in your ...
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Does taxation of Treasury Inflation Protected Securities (TIPS) undermine their function as protection against inflation?

From this document from Vanguard: TIPS are taxed in a slightly different manner than conventional Treasury bonds. The periodic inflation-based “gross-up” in the principal of TIPS is taxed at ...
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Should I Be Worried About A Government Default? [closed]

Is this actually true and if so, should I be worried about a default since I own quite a few US bonds? I can't see how this is sustainable at all. I asked my financial adviser and she laughed. What ...
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Do bonds make sense as an investment right now?

I live in Ohio in the US and I have a sizable chunk of change tucked away in cash. I think that political and economic conditions are a little to unpredictable. (Ok TBH, when has anything to do with ...
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287 views

Why is the yield to maturity of a long-term STRIP typically lower than that of a short-term STRIP?

Why is the yield to maturity (YTM) of a long-term STRIP typically lower than that of a short-term STRIP?
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Bought agency bond (FANNIE MAE 0% 04/08/2027), now what?

I just bought 15 of these for $10,677 through my brokerage firm. It says 3.3% interest. I have no idea how this works. But I trust it is gov bond and will pay 3.3%. Can anyone explain how it works? ...
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How do I short government bonds?

Perhaps it's because I've just watched The Big Short, but I'm bearish on Italian Government bonds right now. How would I go about shorting government bonds?
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Do governments support their own bonds when their value goes down?

I'm far from expert in finance, so please bear with me. It's my understanding that a company who issued stock typically support it when the stock price go down. Does the same thing happen with ...
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Explain this passage from The Intelligent Investor?

Reading The Intelligent Investor and came across a passage (pg 48) which I felt I couldn't fully grasp. I'd appreciate it if someone could explain it using simpler language: Toward the end of 1971 ...
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Are there Treasury Inflation-Protected Securities that offer an additional interest rate?

My understanding of tips is that if I purchase one at a price P and it matures in Y years then in Y years I will be given a payout of P*(1+r)Y where r is the inflation rate. Do there exist any ...
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Does it make any sense for UK private investors to hold gilts directly and outside of a tax wrapper?

According to my understanding of gilts (which is in accordance with the answers here), private investors in UK gilts paying a premium on the redemption price (for example 2% T20s currently report a ...
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How to read bond yield quotes? What do the time, coupon, price, yield, and time mean?

I am newbie in finance and I recently saw Bloomberg bond yields quoted as follows: Can anyone specify what "1 month" and "1 year" mean? What do coupon, price, yield and time (EDT) mean?
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How do UK Gilts interest rates and repayments work?

I'm looking at UK Gilts and trying to understand how the interest rates and repayments really work. As I understand, if I buy £100 of a "5% Treasury Gilt 2020" it means I will get 5% interest each ...
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414 views

How do short term treasury bills work?

I'm trying to understand what return I'll get on 1 month treasury bills. I want to invest in something that has minimal risk, minimal management, and flexibility to get my money out. I'm looking at ...
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239 views

How are bonds affected by the Federal Funds Rate?

My question is how do bonds react to changes in the Federal Funds Rate? Specifically, government bonds, because I don't see corporate bonds being affected as drastically. I've done research, but for ...
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How do government bond yields work?

Let's take the following quote from Bloomberg: Russian government bonds rose, pushing the yield to the lowest level in almost three weeks, as inflation data boosted speculation the central bank may ...
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Are AAA private-sector corporate bonds safer than government bonds?

Conventional wisdom says that government bonds are the safest investment there is. But the Indian government is rated only one level above junk. Aren't AAA-rated bonds of Indian companies safer? Haven'...
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If I cash in a U.S. treasury bond before maturity, do I lose out on the difference in face value and purchase value?

I have a 30-year U.S. treasury bond (series EE) that is about 3 years away from maturity. I'm considering cashing it in. However, the purchase value was half the face value. If I cash it in, would I ...
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Basic understanding of bonds, values, rates and yields

I'm looking for a very simplistic (ELI5) explanation of how bonds work, but I'm not sure I have the basics correct. As I understand it, a bond is basically a IOU or loan. Any company, government or ...
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How will interest rate changes affect my government bonds ETF?

I have two government bond ETFs as part of my portfolio. These are IBTS and IBGS, that have 1-3 year bonds of the US and Europe. What happens if interest rates become higher? Will these lose value ...
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Is interest from US Savings Bonds subject to nonresident alien tax withholding?

A person received some US Series EE Savings Bonds when he was a child. He was always a nonresident alien for US tax purposes and he is not from a treaty country. The Bonds matured in 2001 and has ...
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Where do I-Bonds fit into personal finance plans?

I'm mainly interested in a finding a medium-term, low risk savings vessel. Bank and Credit Union savings accounts available to me at the moment are all < 1% APY, so inflation-protected securities ...
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321 views

Why are U.S. Treasury interest rates are so low vs. other nearly risk-free rates?

I was reading Options,Futures and Other Derivatives by John Hull and I came across the question: Why are US Treasury rates significantly lower than other rates that are close to risk-free? I ...
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Tangible alternative to paper U.S. savings bonds?

When I was little, it was fairly common to get US Savings Bonds from relatives. It introduced me to savings, financial instruments, and the idea of delayed gratification. I know there are 529 plans, a ...
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Understanding payment options with NS&I Bonds

So, just like many, my parents want to invest in: http://www.nsandi.com/65-guaranteed-growth-bonds?ccd=NALBAA since they are supposed to be quite good however, there is a genuine fear that the money ...
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Did Greece really issue bonds to investors yielding 42% interest?

I read this in the news regarding Greece's financial crisis: The country’s 10-year bond yield fell 11 basis points to 8.04 percent at 12:26 p.m. in Athens today. While that’s down from a record ...
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Could someone help me understand bond information?

I'm currently looking at this website for information on Government of Canada bonds. I was just wondering if anyone could tell me when the coupon payments are made (is there only one at maturity?) and ...
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Does pursuing the highest yields or pursuing the lowest ones give better returns in the long run?

Consider two people (Alice and Bob) who have some money each month to save and invest in government bonds of their own country (because they want it to be liquid, and have the smallest risk of default)...
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Please help me understand reasons for differences in Government Bond Yields

First off, I'm completely new to all of this, so please go easy on me. According to http://markets.ft.com/research/Markets/Bonds I notice that the yields on the following government bonds are as ...
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How does the price of expiring bonds expected to change?

There are some old bonds here in Hungary that currently sells at 111% of face value and after taxes they have 5,1% coupon yield. They have 3 years left. If I keep it till maturity, the YTM is only 0,...
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Treasury bills, how do they work?

I am looking at Bills tab on the site: http://www.treasurydirect.gov/instit/annceresult/annceresult.htm There is a 4-week security term with what appears to be a 4-week maturity date, with "high-...
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Where to buy good corporate/goverment/treasury bonds? [closed]

I am non american citizen. I read a portion of Benjamin Grahams, "The Intelligent Investor" he suggests that one should always have a portion of ones savings in bonds. Specifically, he mentions SERIES ...
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Why are real-term bond yields systematically declining, and what does it mean for investors?

I'm having hard time understanding what is causing the trend below: In theory, since it is inflation adjusted I'd expect the yield to fluctuate with the economic cycle, but not systematically drift ...
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Why are US treasury bonds priced in 32nds?

What is the historical reason for treasury bonds to be priced in 32nds? I have tried using Google and this site to find the answer, but have not been able to find anything definite. Three ...