Search results “Bonds with 100 year maturity”
Would you buy a 100 year bond yielding 7.91%?
Would you buy a 100 year bond yielding 7.91%?
Views: 211 Bill Gunderson
Why Bond Prices and Yields are Inversely Related
Help us make better videos: http://www.informedtrades.com/donate Trade stocks and bonds with Scottrade, the broker Simit uses: http://bit.ly/scottrade-IT (see our review: http://bit.ly/scottrade-IT2) KEY POINTS 1. Bond prices and bond yields move in opposite directions. When bond prices go up, that means yields are going down; when bond prices go down, this means yields are going up. Mathematically, this is because yield is equal to: annual coupon payments/price paid for bond A decrease in price is thus a decrease in the denominator of the equation, which in turn results in a larger number. 2. Conceptually, the reason for why a decrease in bond price results in an increase bond yields can be understood through an example. a. Suppose a corporation issues a bond to a bondholder for $100, and with a promise of $5 in coupon payments per year. This bond thus has a yield of 5%. ($5/$100 = 5%) b. Suppose the same corporation then issues additional bonds, also for $100 but this time promising $6 in coupon payments for year -- and thus yielding 6%. No rational investor would choose the old bond; instead, they would all purchase the new bond, because it yielded more and was at the same price. As a result, if a holder of the old bonds needed to sell them, he/she would need to do so at a lower price. For instance, if holder of the old bonds was willing to sell it at $83.33, than any prospective buyer would get a bond that earned $5 in coupon payments on an $83.33 payment -- effectively an annual yield of 6% (5/83.33). The yield to maturity could be even higher, since the bond would give the bondholder $100 upon reaching maturity. 3. The longer the duration of the bonds, the more sensitivity there is to interest rate moves. For instance, if interest rates rise in year 3 of a 30 year bond (meaning there are 27 years left until maturity) the price of the bond would fall more than if interest rates rise in year 3 of a 5 year bond. This is because an interest in interest rates reduces the relative appeal of existing coupon payments, and the more coupon payments that are remaining, the more interest rate fluctuations will impact the price of the bond. 4. Lastly, a small note on jargon: when investors or commentators say, "bonds are up," (or down) they are referring to bond prices. "Bonds are up" thus means bond prices are up and yields are down; conversely, "bonds are down" means bond prices are down and yields are up.
Views: 58661 InformedTrades
Relationship between bond prices and interest rates | Finance & Capital Markets | Khan Academy
Why bond prices move inversely to changes in interest rate. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/treasury-bond-prices-and-yields?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-the-yield-curve?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 495854 Khan Academy
Yield To Maturity - YTM - Bond Example
Example: Suppose you have a risk-free bond that has a face value of $100, a two year maturity, pays a 3 percent coupon with semiannual coupons. The bond is currently trading at $97. What are the stream of cash flows associated with the bond? What is the yield to maturity.
Bloomberg Terminal: Video 2: Introduction to functions for News, Equity, and Bonds
A quick and basic walk-through of how to use the Bloomberg Terminal to look up Top News Stories, the Bond Markets, and Equity Markets.
Views: 7637 Matthew Minnis
Finding Bond Price and YTM on a Financial Calculator
A brief demonstration on calculating the price of a bond and its YTM on a financial calculator
Bond Pricing, Valuation, Formulas, and Functions in Excel
Excel Forum: https://www.teachexcel.com/talk/microsoft-office?src=yt Excel Tutorials: https://www.teachexcel.com/src=yt This tutorial will show you how to calculate bond pricing and valuation in excel. This teaches you how to do so through using the NPER() PMT() FV() RATE() and PV() functions and formulas in excel. To follow along with this tutorial and download the spreadsheet used and or to get free excel macros, keyboard shortcuts, and forums, go to: http://www.TeachMsOffice.com
Views: 171634 TeachExcel
Making America's Roads Great Again Through...Bonds?
Jim Cramer discusses the appeal of 50 to 100 year savings bonds with David Yoe Williams, a commodities/gold expert. Williams speaks to the opportunity of toll roads and pipelines being publicly funded and the public having equity in infrastructure. Williams is a principal at Strategic Gold, a Naples, Fla.-based firm that buys and stores physical gold for investors. He was an NYSE floor trader for 29 years for Richardson Greenshields, Glenwood Securities and other firms. Williams holds a b.s. in civil engineering from the U.S. Military Academy at West Point. Subscribe to TheStreetTV on YouTube: http://t.st/TheStreetTV For more content from TheStreet visit: http://thestreet.com Follow TheStreet on Twitter: http://twitter.com/thestreet Like TheStreet on Facebook: http://facebook.com/TheStreet Follow TheStreet on LinkedIn: http://linkedin.com/company/theStreet Follow TheStreet on Google+: http://plus.google.com/+TheStreet
Bond Pricing on the Term Structure of Interest Rates with Expected Inflation Rate Changes
Consider the following spot interest rates for maturities of one, two, three, and four years. Year | Rate 1 | 4% 2 | 5% 3 | 6% 4 | 7% What is the price of a four year, 4 percent coupon bond with a face value of $100? Assume the bond pays an annual coupon. What are our expectations of the yield for a one year bond that starts in one, two, and three years, i.e., what are the forward rates? Suppose the inflation expectations are a constant 2 percent, what are the expected real interest rates for each one year period in the future? Suppose that immediately after purchasing the bond that market expectations of the inflation rate decrease to a constant one percent. What are our new nominal forward rates? Assume expectations of real interest rates have not changed. In one year, what do we expect the new term structure of interest rates to be? In one year, what do we expect the price of the bond to be based on the new term structure of interest rates? What do we expect the holding period return to be if you sell it immediately after receiving the first year’s coupon? Note: There is a typo in calculating the holding period return. The correct formula is (92.22 - 90.17 + 4)/90.17 = 6.7% Note: A pdf of the solution is available from here: https://goo.gl/MeMDkv
The basics of bonds - MoneyWeek Investment Tutorials
In his latest video tutorial, MoneyWeek’s former deputy editor Tim Bennett explains the basics of bonds – what they are and how they work. Visit http://moneyweek.com/youtube for extra videos not found on YouTube. MoneyWeek videos are designed to help you become a better investor, and to give you a better understanding of the markets. They’re aimed at both beginners and more experienced investors. In all our videos we explain things in an easy-to-understand way. Some videos are about important ideas and concepts. Others are about investment stories and themes in the news. The emphasis is on clarity and brevity. We don’t want to waste your time with a 20-minute video that could easily be so much shorter. Related links… -What are derivatives? https://www.youtube.com/watch?v=Wjlw7ZpZVK4 - What are options and covered warrants? https://www.youtube.com/watch?v=3196NpHDyec - What are futures? https://www.youtube.com/watch?v=nwR5b6E0Xo4 - What is a swap? https://www.youtube.com/watch?v=uVq384nqWqg - Why you should avoid structured products https://www.youtube.com/watch?v=Umx5ShOz2oU
Views: 204900 MoneyWeek
Bond Prices - Forward Rates - Holding Period Returns
This video is a supplement to an investments course I teach. In this video I walk through the following problem: Example: Suppose you have a risk-free bond that has a face value of $100, a two year maturity, pays a 3 percent coupon with semiannual coupons. The term structure of interest rates (via STRIPS) are provided in the table below. What is the price of the bond today? What is its YTM? What is the price of the bond in six months? What was your holding period return? Years | APR 0.5 | 2% 1.0 | 6% 1.5 | 8% 2.0 | 10% A pdf of the solution is available here: https://drive.google.com/file/d/0B3xxLxQB8cTzUTZqUXg3bFFIcE0/view?usp=sharing A pdf of the solution to a similar problem is available here: https://drive.google.com/file/d/0B3xxLxQB8cTzUXBQdVpWS0NxdU0/view?usp=sharing -------------------------------------------------------------------------------- General Recommendations for Finance Reading -------------------------------------------------------------------------------- Fundamentals of Investments: http://amzn.to/2r9gCXC The Intelligent Investor: http://amzn.to/2sGY6rt A Random Walk Down Wall Street: http://amzn.to/2r9qX5N
Bond Futures: How to Trade Bond Futures | Bond Futures Trading Strategies tutorial - Jonathan Rose
Let me show the Correct Way to Trade Bond Futures Learn how to Trade Bond Futures. DONT MISS YOUR FREE WEEK https://goo.gl/RXhLnY .This is Bond Futures Trading Strategies tutorial. What is Bond Futures? Although the stock market is the first place in which many people think to invest, the U.S. Treasury bond markets arguably have the greatest impact on the economy and are watched the world over. Unfortunately, just because they are influential, doesn't make them any easier to understand, and they can be downright bewildering to the uninitiated. At the most basic level, a bond is a loan. Just as people obtain a loan from the bank, governments and companies borrow money from citizens in the form of bonds. A bond really is nothing more than a loan issued by you, the investor, to the government or company, the issuer. For the privilege of using your money, the bond issuer pays something extra in the form of interest payments that are made at a predetermined rate and schedule. The interest rate often is referred to as the coupon, and the date on which the issuer must repay the amount borrowed, or face value, is called the maturity date. One wrinkle in the equation, though, is that not all debt is created equal with some issuers being more likely to default on their obligation. As such, credit rating agencies evaluate companies and governments to give them a grade on how likely they are to repay the debt (see "Good, better, best"). Benji Baily and Delmar King, fixed income investment managers at Everence Financial, say ratings generally can be classified as investment grade or junk. "Anything that's considered to be an investment grade, you would have a fairly high probability that you're going to get your money back at maturity," King says. "Of course, the lower you go down the credit spectrum, the more risk there is of default and the possibility that you could have losses. Therefore, the lower the security grade you have, the more yield compensation you should have for taking that default risk." So, if you purchased a 30-year U.S. Treasury bond (currently AA+ from S&P and AAA from Moody's and Fitch) for $100,000 with a coupon rate of 6%, then you could expect to receive $6,000 a year for the duration of the bond and then receive the face value of $100,000 back. At least, that's how a bond would work if you held it to maturity. Rather than hold a bond to maturity, they also can be traded. But, as a bond is traded, interest rates can change, so the overall value of the bond can change. "If you bought a bond that has a 10% coupon and the rest of the market is fine with owning a 1% coupon, then someone is going to love to have that 10% coupon until maturity," Baily says. "Conversely, if you have a 1% bond and everyone else is expecting that the market in general will be at 10%, then you're going to need to pay someone a lot of money to take that 1% bond instead of buying a new 10% bond." Because coupon rates generally are fixed, to adjust for future expectations the price of the bond or note has to move up or down. If yields, the interest or dividends received on a security, go up, the price will fall to accommodate that higher yield; if yields go down, then price has to go up. GRAB YOUR FREE WEEK HERE https://goo.gl/RXhLnY Nayeem Talukder, [15.01.18 06:29] 5 Secret Tips Options Trading: How To Trade Stock Options: https://www.youtube.com/watch?v=-2v-LrBoFWA 5 Secret Tips to Trade Stock Options During Earnings Season - options for beginners https://www.youtube.com/watch?v=awbh33LxYXk How to trade stock options Playlist: https://www.youtube.com/watch?v=awbh33LxYXk&list=PLR_XM0ZsTUySgd3JmlvNv0xosYVz5iAcr SUBSCRIBE FOR STOCK OPTION EDUCATION AND TRADE IDEAS! https://www.youtube.com/channel/UCa5hPmX8-q03fxDYLi9XM7w SUBSCRIBE TO OUR EMAIL LIST http://activedaytrader.com LETS CONNECT http://facebook.com/activedaytrader Email me anytime: [email protected] analysis options for beginners technical analysis options strategies Tending search on youtube: #stockOptions #howtotradestockoptions #tradingStrategies #tradingOptions #BondFutures #BondFuturesStrategies pairs trading jonathan rose
Views: 6466 Jonathan Rose
Pricing a risk-free bond based on STRIPS - Example 1
Example: Suppose you have a risk-free bond that has a face value of $100, a two year maturity, pays a 3 percent coupon with semiannual coupons. The current prices of STRIPS (per $1,000 face value) are provided in the table below. What is the price of the bond? Years Price 0.5 $970 1.0 $955 1.5 $935 2.0 $900
Bonds are Bad - Here's Why
Bonds don't grow. As I sing in the video, "There is NO Growth in Bonds!" SImple mathematics here folks. 10 year bond is issued at 100k. It pays 3% a year interest. Bond matures at 100k. Thus your nominal return is 3% a year. But after taxes and inflation you've actually LOST money. 30 year bond is issued at 100k paying 4% a year. 30 years from now you collect your $100k. After taxes and inflation (assuming inflation stayed only at 3% the entirety of the 30 years) you've made all of $12k Can't build a long term retirement portfolio with investments that LOSE money gradually over time. And that's what bonds do. They gradually LOSE you money. Factor in a higher inflation for retirees because of increasing health care costs and bonds look even worse. Some will argue that "my bond fund has averaged 7.75% a year since 1974. So I think you're full of it Josh." To which I'd simply say, "yup, and you're not going to get anywhere near 7..74% on your bonds going forward. It's a simple mathematical equation." You can't argue with the math. Well, I suppose you could, but you'd be wrong.
Yield to Maturity Formula - Approximation
In this tutorial, you’ll learn how to approximate the Yield to Maturity (YTM) of a bond, including how you might modify it to cover Yield to Call and Yield to Put as well as real-life scenarios with debt investing. http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 1:14 Part 1: The Yield to Maturity (YTM) and What It Means 5:27 Part 2: How to Quickly Approximate YTM 10:19 Part 3: How to Extend the Formula to Yield to Call and Yield to Put 13:32 Part 4: How to Use This Approximation in Real Life 16:27 Recap and Summary Part 1: The Yield to Maturity (YTM) and What It Means Yield to Maturity is the internal rate of return (IRR) from buying the bond at its current market price and holding it to maturity. Assumption #1: You hold the bond until maturity. Assumption #2: The issuer pays all the coupon and principal payments, in full, on the scheduled dates. Assumption #3: You reinvest the coupons at the same rate. Intuition: What’s the *average* annual interest rate % + capital gain or loss % you earn from the bond? You can use the YIELD function to calculate this in Excel: =YIELD(Settlement Date, Maturity Date, Coupon Rate, Bond Price % Par Value Out of the Number 100, 100, Coupon Frequency) For example, if you buy a 5% bond for 96.23% of its par value on December 31, 2014, and hold it until its maturity on December 31, 2024, you could enter: =YIELD(“12/31/2014”, “12/31/2024”, 5%, 96.23, 100.00, 1) = 5.500% You could also project the cash flows from the bond and use the IRR function to calculate YTM, but this will work only for annual periods and annual coupons. Part 2: How to Quickly Approximate YTM Approximate YTM = (Annual Interest + (Par Value – Bond Price) / # Years to Maturity) / (Par Value + Bond Price) / 2 Intuition: Each year, you earn interest PLUS an annualized gain on the bond price if it’s purchased at a discount (or a loss if it’s purchased at a premium). And you earn that amount on the “average” between the initial bond price and the amount you get back upon maturity. For example, on a 10-year $1,000 bond with a price of $900 and coupon of 5%: Annual Interest = 5% * $1,000 = $50 Par Value – Bond Price = $1,000 – $900 = $100 (Par Value + Bond Price) / 2 = ($1,000 + $900) / 2 = $950 Approximate YTM = ($50 + $100 / 10) / $950 = $60 / $950 = ~6.3% There are a few limitations: the approximation doesn’t work as well with big discounts or premiums to par value, nor does it work as well with different settlement and maturity days. It also will not handle floating interest rates since it assumes a fixed coupon. Part 3: How to Extend the Formula to Yield to Call and Yield to Put Call options on bonds let companies redeem a bond early when interest rates have fallen, or its credit rating has improved, meaning it can refinance at a lower rate. Usually, the company has to pay a premium to par value to call the bond early. Put options are the opposite, and let investors force early redemption (usually when interest rates have risen, or the company’s credit rating has fallen). Approximate Yield to Call or Yield to Put = (Annual Interest + (Redemption Price – Bond Price) / # Years to Maturity) / ((Redemption Price + Bond Price) / 2) For example, to calculate the Yield to Call on a 10-year $1,000 bond with a price of $900, coupon of 5%, and a call date 3 years from now at a redemption price of 103: Approximate YTC = ($50 + ($1,030 – $900) / 3) / (($1,030 + $900) / 2) Approximate YTC = ($50 + $43) / $965 = $93 /$965 = ~9.7%, which you can estimate as “just under 10%” Part 4: How to Use This Approximation in Real Life Example: You’re at a credit fund that targets a 10% IRR on investments in high-yield debt. JC Penney has a 4-year 7.950% bond that’s currently trading at 91.75 (as in, 91.75% of par value). This seems like an easy “yes”: you get around 8% interest per year + an 8% discount / 4, and ~10% / average price of 96% results in a yield just above 10%. BUT will a distressed company be able to repay the bond principal upon maturity? What if its financial situation worsens? You estimate that in the best-case scenario, you’ll get 65% of the principal back upon maturity (65% “recovery percentage”). The recovery percentage will be 47% and 13% in more pessimistic cases. Scenario 1 Approximate YTM: (8% – 27% / 4) / 78.5% = 1.6% Scenario 2 Approximate YTM: (8% – 45% / 4) / 69.5% = -4.7% So this is almost certainly a “No Invest” decision if these recovery percentages are accurate – even in the Upside Case, we’re far below 10%. RESOURCES: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/Yield-to-Maturity-Formula-Slides.pdf https://youtube-breakingintowallstreet-com.s3.amazonaws.com/Yield-to-Maturity-Formula.xlsx
Why the 10-Year U.S. Treasury Yield Matters
10-year treasury bond yields are important indicators of the economy as a whole. Treasury bond yields (or rates) are tracked by investors for many reasons. The yields on the bonds are paid by the U.S. government as "interest" for borrowing money (via selling the bond). But what does it mean and how do you find yield information? Why is the ten-year treasury yield so important? The importance of the ten-year treasury bond yield goes beyond just understanding the return on investment for the security. The ten-year is used as a proxy for many other important financial matters, such as mortgage rates. This bond, which is sold at auction by the U.S. government, also tends to signal investor confidence. When confidence is high, the ten-year treasury bond's price drops and yields go higher because investors feel they can find higher returning investments and do not feel they need to play it safe. But when confidence is low, the price goes up as there is more demand for this safe investment and yields fall. This confidence factor can also be explored in non-U.S. countries. Often the price of U.S. government bonds is impacted by the geopolitical situations of other countries with the U.S. being deemed a safe haven, pushing the prices of U.S. government bonds up (as demand increases) and lowering yields. Another factor related to the yield is the time to maturity such that the longer the treasury bond's time to maturity, the higher the rates (or yields) because investors demand to get paid more the longer the investment ties up their money. This is a normal yield curve, which is most common, but at times the curve can be inverted (higher yields at lower maturities). 10-Year Treasury Yields Because the ten-year treasury yields are so closely followed and scrutinized, knowledge of the historical pattern is an integral component of understanding how today's yields fare as compared to historical rates. Below is a chart of the ten-year yields going back ten years. While rates do not have a wide dispersion, any change is considered highly significant and large changes -of 100 basis points- over time can redefine the economic landscape. Perhaps the most relevant aspect is in comparing current rates with historical rates, or following the trend to analyze if the near term rates will rise or fall based on historical patterns. Using the website of the U.S. Treasury itself, investors can easily analyze historical ten-year treasury bond yields. The ten-year treasury is a economic indicator in a sense that its yield tells investors more than the return on investment. While the historical yield range does not appear wide, any basis point movement is a signal to the market.
How much is your savings bond worth?
Just because your savings bonds have reached maturity doesn't mean they aren't paying interest; some still have very attractive yields.
Views: 17978 CNN Business
Investing Basics: Bonds
Bonds are one of the most common investments, but to many investors they’re still a mystery. In this video you’ll learn the basics of bonds and how they might be used by traders looking to preserve capital and pursue extra income.
Views: 112524 TDAmeritrade
Fixed Income High Yield Money Market, CD and Short Term Bonds
Fixed Income High Yield Money Market, CD and Short Term Bonds Many investors and non investors want to park their money and get the best interest rate and yield. With the rising interest rate environment, rates on CD's, Money Market Funds, Short Term Bond Funds have become more attractive. Fixed Income Investing- Money Market, CD and Short Term Bonds High Yield US Treasury Note - 2.80% - 2 year maturity 2.60% - 1 year maturity Money Market VMMXX Vanguard Money Market Prime - 2.13% SWVXX Charles Money Market Fund - 2.03% SPRXX Fidelity Money Market Fund - 1.90% CD's - Certificate of Deposit 1 year - 2.65% 2 year - 3.00% Short Term Bond Taxable DLSNX - Double Line Low Duration Bond Fund - 3.26% FFRHX - Fidelity Floating Rate High Income - 4.21.% Tax Exempt VWSTX - Vanguard Short Term Tax Exempt Fund 1.73% Duration 1.1 Years VWAHX - Vanguard High Yield Tax Exempt Fund 3.31% Duration 6.6 Years Investment Grade Corp Bonds High Yield Bonds Municipal Bonds
Views: 111 Wisdom Investor
Bond yields signal recession?
The markets sold off a little more to start the week as tech stocks weighed on the overall market. The Dow 30 was lower by 16, the S&P 500 closed the day flat and the Nasdaq 100 closed down 17 on the day. Goldman Sachs (NYSE: GS) was your worst performer in the Dow as banks continue to selloff following earnings. The “FANG” stocks helped pull the Nasdaq 100 lower on the day, with Amazon (NASDAQ: AMZN), and Netflix (NASDAQ: NFLX) being the worst performers. The 10 year treasury note yield reached the 3% mark for the first time since 2014 today which further flattens out the yield curve. This has many concerned of a pending recession, and was a focus on financial media today. Merck (NYSE: MRK) shares were higher by 2.40% today, leading the Dow 30. Shares neared a three month high following a double upgrade from Goldman Sachs. The analyst upgraded the stock to Conviction buy thanks to the progress and success of their lung cancer drug, Keytruda. Goldman now has a price target of $73, up from $63 due to their assumptions that Keytruda will be a “$16 billion asset by 2025.” In other news, Alaska Air (NYSE: ALK) shares added 5.70% despite missing revenue numbers as overall profit came in higher than expected. Hasbro (NYSE: HAS) earnings came up short but investors bought the dip, closing shares higher by 4%. Halliburton (NYSE: HAL) announced mixed earnings but shares remained near the high end of the recent range. As for earnings, this will be the busiest week of earnings season with over 170 names in the S&P 500 reporting by the end of the week. Facebook (NYSE: FB), Amazon (NASDAQ: AMZN), and Alphabet (NASDAQ: GOOGL) are some of the names that will likely dominate this weeks, earnings headlines.
Views: 1709 Jazz Wealth Managers
Introduction to bonds | Stocks and bonds | Finance & Capital Markets | Khan Academy
What it means to buy a bond. Created by Sal Khan. Watch the next lesson: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/introduction-to-the-yield-curve?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Missed the previous lesson? Watch here: https://www.khanacademy.org/economics-finance-domain/core-finance/stock-and-bonds/bonds-tutorial/v/corporate-debt-versus-traditional-mortgages?utm_source=YT&utm_medium=Desc&utm_campaign=financeandcapitalmarkets Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy. About Khan Academy: Khan Academy offers practice exercises, instructional videos, and a personalized learning dashboard that empower learners to study at their own pace in and outside of the classroom. We tackle math, science, computer programming, history, art history, economics, and more. Our math missions guide learners from kindergarten to calculus using state-of-the-art, adaptive technology that identifies strengths and learning gaps. We've also partnered with institutions like NASA, The Museum of Modern Art, The California Academy of Sciences, and MIT to offer specialized content. For free. For everyone. Forever. #YouCanLearnAnything Subscribe to Khan Academy’s Finance and Capital Markets channel: https://www.youtube.com/channel/UCQ1Rt02HirUvBK2D2-ZO_2g?sub_confirmation=1 Subscribe to Khan Academy: https://www.youtube.com/subscription_center?add_user=khanacademy
Views: 482033 Khan Academy
Building Excel Model for $100MM Muni Bond Deal
Peter Orr (www.intuitive-analytics.com) shows how to build an Excel model for a $100 million, 20 year, level debt service muni bond deal. He details the building of Sources and Uses of Funds and ultimately the principal and interest schedules to be paid by the borrower. Peter uses goal seek to determine the amount of annual debt service required to properly size the issue and minimize annual debt service cost given assumed market rates.
Views: 5811 intuitveAnalytics
What are Treasury Securities?
Welcome to the Investors Trading Academy talking glossary of financial terms and events. Our word of the day is “Treasury Securities” These U.S. government-issued debt securities are divided into three categories by maturity dates: Treasury bonds mature in 10 or more years, Treasury notes mature between one and 10 years and Treasury bills mature in one year or less. These debt obligations are considered the safest option for bond investors since they are backed by the full faith and credit of the U.S. government. But that safety comes at a price: The interest rates on Treasury’s are lower than other bonds with the same duration. Treasury securities are divided into three categories according to their lengths of maturities. These three types of bonds share many common characteristics, but also have some key differences. The categories and key features of treasury securities include: T-Bills – These have the shortest range of maturities of all government bonds at 4, 13, 26 and 52 weeks. They are the only type of treasury security found in both the capital and money markets, as three of the maturity terms fall under the 270-day dividing line between them. T-Bills are issued at a discount and mature at par value, with the difference between the purchase and sale prices constituting the interest paid on the bill. T-Notes – These notes represent the middle range of maturities in the treasury family, with maturity terms of 2, 3, 5, 7 and 10 years currently available. Treasury notes are issued at a $1,000 par value and mature at the same price. They pay interest semiannually. T-Bonds – Commonly referred to in the investment community as the “long bond”, T-Bonds are essentially identical to T-Notes except that they mature in 30 years. T-Bonds are also issued at and mature at a $1,000 par value and pay interest semiannually. By Barry Norman, Investors Trading Academy
Different Types of Bonds | Introduction to Corporate Finance | CPA Exam BEC | CMA Exam | Chp 7 p 4
In this section, we briefly look at bonds issued by governments and also at bonds with unusual features. GOVERNMENT BONDS The biggest borrower in the world—by a wide margin—is everybody’s favorite family member, Uncle Sam. In early 2014, the total debt of the U.S. government was $17.5 trillion, or about $55,000 per citizen (and growing!). When the government wishes to borrow money for more than one year, it sells what are known as Treasury notes and bonds to the public (in fact, it does so every month). Currently, outstanding Treasury notes and bonds have original maturities ranging from 2 to 30 years. Most U.S. Treasury issues are just ordinary coupon bonds. There are two important things to keep in mind, however. First, U.S. Treasury issues, unlike essentially all other bonds, have no default risk because (we hope) the Treasury can always come up with the money to make the payments. Second, Treasury issues are exempt from state income taxes (though not federal income taxes). In other words, the coupons you receive on a Treasury note or bond are taxed only at the federal level. For information on municipal bonds including prices, check out emma.msrb.org. State and local governments also borrow money by selling notes and bonds. Such issues are called municipal notes and bonds, or just “munis.” Unlike Treasury issues, munis have varying degrees of default risk, and, in fact, they are rated much like corporate issues. Also, they are almost always callable. The most intriguing thing about munis is that their coupons are exempt from federal income taxes (though not necessarily state income taxes), which makes them very attractive to high-income, high–tax bracket investors. FLOATING-RATE BONDS The conventional bonds we have talked about in this chapter have fixed-dollar obligations because the coupon rates are set as fixed percentages of the par values. Similarly, the principal amounts are set equal to the par values. Under these circumstances, the coupon payments and principal are completely fixed. OTHER TYPES OF BONDS Many bonds have unusual or exotic features. So-called catastrophe, or cat, bonds provide an interesting example. In August 2013, Northshore Re Limited, a reinsurance company, issued $200 million in cat bonds (reinsurance companies sell insurance to insurance companies). These cat bonds covered hurricanes and earthquakes in the U.S. In the event of one of these triggering events, Northshore Re would receive cash flows to offset its loss. The largest single cat bond issue to date is a series of six bonds sold by Merna Reinsurance in 2007. The six bond issues were to cover various catastrophes the company faced due to its reinsurance of State Farm. The six bonds totaled about $1.2 billion in par value. During 2013, about $7.6 billion in cat bonds were issued, and there was about $20.6 billion par value in cat bonds outstanding at the end of the year. ncome bonds are similar to conventional bonds, except that coupon payments depend on company income. Specifically, coupons are paid to bondholders only if the firm’s income is sufficient. This would appear to be an attractive feature, but income bonds are not very common. A convertible bond can be swapped for a fixed number of shares of stock anytime before maturity at the holder’s option. Convertibles are relatively common, but the number has been decreasing in recent years. A put bond allows the holder to force the issuer to buy back the bond at a stated price. For example, International Paper Co. has bonds outstanding that allow the holder to force International Paper to buy the bonds back at 100 percent of face value if certain “risk” events happen. One such event is a change in credit rating from investment grade to lower than investment grade by Moody’s or S&P. The put feature is therefore just the reverse of the call provision. The reverse convertible is a relatively new type of structured note. One type generally offers a high coupon rate, but the redemption at maturity can be paid in cash at par value or paid in shares of stock. For example, one recent General Motors (GM) reverse convertible had a coupon rate of 16 percent, which is a very high coupon rate in today’s interest rate environment. However, at maturity, if GM’s stock declined sufficiently, bondholders would receive a fixed number of GM shares that were worth less than par value. So, while the income portion of the bond return would be high, the potential loss in par value could easily erode the extra return. Perhaps the most unusual bond (and certainly the most ghoulish) is the “death bond.” Companies such as Stone Street Financial purchase life insurance policies from individuals who are expected to die within the next 10 years.
Mexico and Its Bond Deal of the Century
https://cnb.com/global-perspectives Another interest rate record was smashed this week when the three-month Euribor – the benchmark interbank lending rate in the eurozone – went negative for the first time. Germany has negative interest rates out to nine years and markets are on watch to see if the critical German 10-year bund moves into negative yield territory. Spain, one of the southern European countries that markets thought might default on its debt just a few years ago, now has short-term debt at negative yields. The quirky negative rate environment is producing bizarre behavior and creating opportunities as well as some chaos. It is clear that if investors in European bonds – and there are a lot of those these days – want to get any meaningful return on their money, they need to go farther out on the yield curve. Interestingly, Mexico offered a unique solution. Earlier this month it issued euro-denominated debt and at a low yield of 4.2%, but with a rare 100-year maturity, also called “century bonds.” Mexico’s €1.5 billion sale of this euro-denominated debt out to March 2115 ensures that it gets funding in the single currency at reasonable rates. This is important for a country like Mexico, which operates in a kind of twilight zone of finance. Mexico is lumped in with all of the other countries noted as “emerging markets” and suffers from a general lack of access to finance for that reason. However, investors are generally united in their opinion that Mexico has well-run finances. Hence, Mexico can secure relatively low rates for an offering as spectacular as a 100-year bond while investors get an interest rate on euros that looks extraordinarily high in comparison to all of those with a negative sign in front of them. It’s attractive to institutional investors in Europe that are tasked with finding investment-grade debt offerings with reasonable yields. Our View: Whether this is a good move or not may not be entirely clear for, well, 100 years. Nevertheless, it is a sign of the times, and a valid effort by Mexico to manage its complex finances.
Views: 58 City National Bank
10. Debt Markets: Term Structure
Financial Markets (ECON 252) The markets for debt, both public and private far exceed the entire stock market in value and importance. The U.S. Treasury issues debt of various maturities through auctions, which are open only to authorized buyers. Corporations issue debt with investment banks as intermediaries. The interest rates are not set by the Treasury, the corporations or the investment bankers, but are determined by the market, reflecting economic forces about which there are a number of theories. The real and nominal rates and the coupons of a bond determine its price in the market. The term structure, which is the plot of yield-to-maturity against time-to-maturity indicates the value of time for points in the future. Forward rates are the future spot rates that can be calculated using today's bond prices. Finally, indexed bonds, which are indexed to inflation, offer the safest asset of all and their price reveals a fundamental economic indicator, the real interest rate. 00:00 - Chapter 1. Introduction 04:25 - Chapter 2. The Discount and Investment Rates 19:12 - Chapter 3. The Bid-Ask Spread and Murdoch's Wall Street Journal 29:17 - Chapter 4. Defining Bonds and the Pricing Formula 39:38 - Chapter 5. Derivation of the Term Structure of Interest Rates 52:34 - Chapter 6. Lord John Hicks's Forward Rates: Derivation and Calculations 01:06:09 - Chapter 7. Inflation and Interest Rates Complete course materials are available at the Open Yale Courses website: http://open.yale.edu/courses This course was recorded in Spring 2008.
Views: 50317 YaleCourses
US Savings Bonds
http://www.profitableinvestingtips.com/bond-investing/us-savings-bonds US Savings Bonds By www.ProfitableInvestingTips.com US savings bonds are often thought of as a poor man's route to savings. Many aggressive investors and traders scoff at the idea of buying US savings bonds every payday and holding them for as long as thirty years. However, there are a number of advantages to buying and holding US savings bonds. As with all investment opportunities a little fundamental analysis of the subject is useful. So before comparing US savings bonds to dividend stocks, US Treasuries, or municipal bonds let us look at a few specifics about US savings bonds. US Savings Bonds These bonds are available in Series EE and Series I. Electronic series EE bonds are purchased via a Treasury Direct account for face value and paper series EE bonds are purchased at their face value. One earns a fixed rate of interest for the thirty year term of the bond. The treasury guarantees that the bonds will double in face value in twenty years. Series I bonds sell at face value at interest rates guaranteed to exceed that of inflation. These bonds are not tradable. The maturity periods can vary. For example, if you buy a bond with a value of $50 for $25, you'll have to wait at least 17 years to get back your investment from the government. US savings bonds are exempt from state and local taxes. Federal tax is deferred until the bond is cashed in. Interest may be tax exempt if you can document that interest was used to pay qualified higher education expenses and provide that your income falls within federal guidelines for this benefit. As with many long term investments you will commonly cash in US savings bonds when you are retired and when your tax rate is low. US savings bonds pay interest twice a year and are redeemed at par value at maturity. Savings Bonds come in eight values: $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. Why Purchase US Savings Bonds? There are certainly lots of investments that can make a lot more money over the years than US savings bonds. And there are lots of investments that can disappear in a puff of smoke during an economic downturn. US savings bonds are like money in the bank. A good rule of thumb for investing is to first pay off credit card debt, invest in your home, and put six months of savings away for emergencies. Think of US savings bonds in this context. US Savings Bonds versus Municipal Bonds Like municipal bonds, US savings bonds are free of state and local taxes. Unlike municipal bonds US savings bonds are less likely to default than when cities like Detroit declare bankruptcy. US Savings Bonds versus Dividend Stocks Dividend stocks are a common way to balance the risk in an aggressive stock portfolio. However, even large cap stocks can fall in price or fall out of favor. When markets are falling US savings bonds still maintain their value and pay interest. Buying US Savings Bonds Bonds are purchased with a Treasury Direct account. For such an account you need a social security number, a driver's license, a checking or savings account, and an email address. According to the US Treasury site: Minimum Purchase: $25 Maximum Purchase: $30,000 per person per year Interest: 90% of 6-month average of 5-year Treasury security yields, added monthly and paid when the bond is cashed Minimum Term Of Ownership: 12 months Early Redemption Penalty: Forfeit three most recent months' interest if cashed before 5 years http://youtu.be/YiLuGt62mZA
Views: 18812 InvestingTip
Yield to Maturity
An example of calculating Yield-to-Maturity using the 5-key approach.
Views: 130378 Kevin Bracker
J.P. Morgan Leads Historic Bond Deal | Oxford University Bond | J.P. Morgan
Learn more about our partnership with Oxford University here: http://bit.ly/YT_JPMOxford Oxford University has enlisted J.P. Morgan to lead the first-ever bond sale in its 850-year history. The university, home to 50 Nobel Prize winners, reached out to the firm for its £750 million debut debt issue. At 100 years, the bond will have the longest maturity of any from a British university and longer than any public issue of U.K. government bonds or gilts. SUBSCRIBE: http://jpm.com/x/i/NFPWfK0 About J.P. Morgan: J.P. Morgan is a leader in financial services, offering solutions to clients in more than 100 countries with one of the most comprehensive global product platforms available. We have been helping our clients to do business and manage their wealth for more than 200 years. Our business has been built upon our core principle of putting our clients' interests first. Connect with J.P. Morgan Online: Visit the J.P. Morgan Website: https://www.jpmorgan.com/ Follow @jpmorgan on Twitter: https://twitter.com/jpmorgan Visit our J.P. Morgan Facebook page: http://facebook.com/jpmorgan Follow J.P. Morgan on LinkedIn: https://linkedin.com/company/j-p-morgan/ Follow @jpmorgan on Instagram: https://instagram.com/jpmorgan/ #jpmorgan J.P. Morgan Leads Historic Bond Deal | Oxford University Bond | J.P. Morgan
Views: 1535 jpmorgan
Pricing a risk-free bond based on STRIPS - Example 2
Example: Suppose you have a risk-free bond that has a face value of $100, a two year maturity, pays a 5 percent coupon with semiannual coupons. The term structure of interest rates (via STRIPS) are provided in the table below. What is the price of the bond? Years APR 0.5 6% 1.0 7% 1.5 8% 2.0 9%
FRM: Comparison of spot curve, forward curve and bond yield
A simple comparison using a 2.5 year $100 par 6% semiannual coupon bond. Spot rate: the yield for each cash flow that treats the cash flow as a zero-coupon bond. A coupon-paying bond is a set of zero-coupon bonds. Forward rate: the implied forward rates that make an investor indifferent to rolling over versus investing at spot. Yield to maturity (YTM, an IRR): the single rate that can be used to discount all of the bond's cash flows, in order to price the bond correctly. So the YTM is a flat horizontal line. For more financial risk videos, visit our website! http://www.bionicturtle.com
Views: 47385 Bionic Turtle
3 Steps to Easy Bond Investing [Market-Proof Your Portfolio]
Stop missing out on your best opportunity for cash flow and safe returns. Learn the secret to investing in bonds and get started now with Step-by-Step Bond Investing https://amzn.to/2MqKE5d Bond investments are way underrated by investors with less than 2% of investors holding any fixed-income at all in their portfolio. That’s despite the fact that bonds provide rock-solid cash flow and safe returns compared to stocks. In fact, bonds have actually beaten the return on stocks during the last decade. Now I love investing in stocks just as much as the next person and I’m not saying you should ditch equities but bonds is going to be the secret asset you add to your portfolio that helps reach your financial goals. I’m going to walk you through three steps to investing in bonds to protect your money while still producing that return and I’ll show you how to find bonds in which to invest on any online site. I’m then going to share my favorite bond investing strategy, something that will make all this super easy so make sure you stick around to the end of the video. From explaining the basics of bond investing to giving you tips for investing in bonds, this video will give you all the tools to diversifying your portfolio and creating consistent returns even in a bear market. - Why bond investing could be the smartest investment decision you make - Stocks vs Bonds: how bond returns actually beat stocks - What happens to bonds when interest rates rise - 3 Steps to investing in bonds - How to pick bond investments and a fixed-income strategy for consistent cash flow SUBSCRIBE to create the financial future you deserve with videos on beating debt, making more money and making your money work for you. https://peerfinance101.com/FreeMoneyVideos Joseph Hogue, CFA spent nearly a decade as an investment analyst for institutional firms and banks. He now helps people understand their financial lives through debt payoff strategies, investing and ways to save more money. He has appeared on Bloomberg and on sites like CNBC and Morningstar. He holds the Chartered Financial Analyst (CFA) designation and is a veteran of the Marine Corps. #investing #stocks #investment
Savings Bonds: "The Egg and US" ~ 1952 Life Magazine; Financing the US Government
Financial Classic Films playlist: https://www.youtube.com/playlist?list=PLE7527E1C9F0B138B more at http://money.quickfound.net/ 'This part-animated, part-live-action film assures us, the American viewer, that we have confidence in the economy and that "the nation's nest egg is growing" to 235 billion dollars in savings. Even though the postwar economy is helping the individual to save money, the national debt totals 275 billion dollars which can be paid off in the most stable manner by the government borrowing from individuals. This film speaks confidently to Americans, assuming and convincing the viewer that they have faith in the American economy, and urging them to purchase U.S. Savings Bonds...' Originally a public domain film from the Library of Congress Prelinger Archives, slightly cropped to remove uneven edges, with the aspect ratio corrected, and one-pass brightness-contrast-color correction & mild video noise reduction applied. The soundtrack was also processed with volume normalization, noise reduction, clipping reduction, and/or equalization (the resulting sound, though not perfect, is far less noisy than the original). http://en.wikipedia.org/wiki/Savings_bond#Nonmarketable_securities Wikipedia license: http://creativecommons.org/licenses/by-sa/3.0/ U.S. Savings Bonds Savings bonds were created to finance World War I, and were originally called Liberty Bonds. Unlike Treasury Bonds, they are not marketable. In 2002, the Treasury Department started changing the savings bond program by lowering interest rates and closing its marketing offices. As of January 1, 2012, financial institutions no longer sell paper savings bonds... In 2002, the Department of the Treasury's Bureau of the Public Debt made savings bonds available for purchasing and redeeming online. Finally, on January 1, 2012, banks and other financial institutions terminated their sales of bonds. Currently, Americans can only buy U.S. savings bonds online at http://www.treasurydirect.gov/. General information Savings bonds come in eight denominations: $25, $50, $75, $100, $200, $500, $1,000, and $5,000. After purchase, the holder must wait at least twelve months before cashing it in, when they will receive the principal amount (the purchase price) plus some interest. The maturity periods can vary. For example, if you buy a bond with a value of $50 for $25, you'll have to wait at least 17 years to get your investment back from the government, depending on the interest rate. The longer you wait, the greater interest you earn, however savings bonds have a 30-year maximum of interest accrual. After 30 years, the bond no longer accrues interest. Savings bonds are protected because they are secured by the U.S. government. The principal and earned interest are registered with the Treasury Department, so if a bond is lost, stolen, or destroyed they can be replaced at no cost. Savings bonds can also have value as a collectible since the government stopped issuing them in paper form. Tax benefits of savings bonds Savings bond interest is tax deferred. This means that you pay tax only when the bond is cashed (or stops earning interest after 30 years). Interest is taxable by the federal government but not state or local governments. Using the money from a cashed savings bond for higher education may keep you from paying federal income tax on your interest. Current bond types There are two types of savings bonds: EE-Bonds and I-Bonds. EE-Bonds are fixed interest bonds guaranteed to double in value over 20 years. The rate is fixed upon purchase. Tax is deferred until the bond is cashed. The maximum amount that can be purchased is $10,000 per person per year in electronic form. I-Bonds have fixed and variable rate components. The fixed rate is set at the time of purchase. The variable rate is adjusted every six months based on consumer price inflation. The variable rate can be less than zero in times of deflation but the combined rate cannot be less than zero. The maximum amount that can be purchased is $10,000 per person per year in electronic form. An additional $5,000 can be purchased by using one's income tax refund on Form 1040...
Views: 779 Jeff Quitney
Fijian Acting PM held a Press Conference on the tender results of Fiji’s Green Bonds.
The Acting Prime Minister, Attorney-General and Minister for Economy, Aiyaz Sayed-Khaiyum today announced the issue of the first green bonds. Fiji became the first emerging market to issue a sovereign green bond, raising $FJ100 million to support climate change mitigation and adaption during the Pre-COP meeting in Nadi recently. Green bonds are fixed income, liquid financial instruments that are used to raise funds dedicated to climate-mitigation, adaptation, and other environment-friendly projects. This provides investors an attractive investment proposition as well as an opportunity to support environmentally sound projects. The A-G, while speaking at a press conference at the Reserve Bank of Fiji (RBF) in Suva, said the issue followed an overwhelming interest recorded in the week-long tender that saw the floated amount of $40 million being significantly oversubscribed. “A total of $87.7 million were received in tenders for the two tenors of 5-year and 13-year bonds. A total of $60.10 million was received for the 5-year bond while a total of $27.61 million was received for the 13-year bond,” the A-G said. Commercial banks also put in a combined tender amounting to $40 million. “We thank the commercial banks for the support as this is the highest amount ever that the banks have tendered for any domestic bond. Given that the tender was oversubscribed, a total of $13.27 million was allotted to the commercial banks. “Other local investors such as the Fiji National Provident Fund, insurance companies, Unit Trust of Fiji and others tendered a total of $47.70 million. There is also, for the first time, an overseas investor for the Green Bond. The participation rate recorded was three times than normally associated with Fiji Government Infrastructure bonds,” the A-G said. He said “as advertised, only $20 million of each tenor was accepted at a coupon rate of 4 per cent per annum for the 5-year maturity and 6.30 per cent for the 13-year maturity.” There will be significant issues in the coming months – December 2017 to May 2018 – in order to raise the targeted amount of $100 million. The floatations will be for the 13-year maturity only henceforth. The A-G acknowledged and thanked the individuals and organisations who bid and put in tenders as it demonstrated their support for this initiative. The RBF is the agency that implements the green bonds. “Government will be establishing a webpage to publish key information about Fiji’s green bond programme and framework. We will also be publicising various projects that will qualify under the funds raised through these bonds,” the A-G added. Projects financed from the green bonds will follow the internationally developed Green Bond Principles, and will focus primarily on investments that build resilience against the impacts of climate change. Fiji will also use bond proceeds for projects supporting its commitment to achieve 100 per cent renewable energy and reduce its CO2 emissions in the energy sector by 30 per cent by 2030.
Views: 179 FijianGovernment
Investopedia Video: What Is A Municipal Bond?
Municipal bonds, often called munis, are considered a debt instrument because when the investor purchases one, he or she is essentially loaning funds to the authority that issued it. In exchange, the authority promises to pay interest, called the coupon rate, during the years prior to maturity, at which point it repays the bond's par value.
Views: 11118 Investopedia
Calculate the Modified Duration of a Bond
Suppose that you have a three-year bond which has a 6 percent coupon rate, has a $100 face value, and pays annual coupons. Market yields for this type of bond are 4 percent. What is the modified duration of this bond?
National Savings Scam || Scam in National Savings Lahore
Biggest-ever fraud detected in National Savings schemes The fraud came to light on maturity of 10-year saving certificates of individuals at a Lahore branch where officials had diverted more than Rs.110 million to bank accounts of their own and their family members and were in the process of withdrawing another Rs.100m or so. This is perhaps the biggest-ever fraud in the institution, said Nadeem Iqbal, director human resources of the Central Directorate of National Savings (CDNS), adding not more than three cases of fraud had been reported in the organization over the past 15-16 years. Like & Subscribe our Channel: https://www.youtube.com/channel/UCvR2bLHgS45J6cA3Xa1UnSA National Savings channel is producing latest updates about National Savings Schemes, Prize Bonds, Latest Draw Lists, Profit Rates, Prize Bond Draw Schedule, Withholding Tax etc
Views: 8404 Savings
Rising Interest Rates Bad for Bonds - Everything Investments
Interest Rates Bad for Bonds - Everything Investments Sign up for our newsletter today http://eepurl.com/ES-x5 Find out more about this at our website http://www.everythinginvestments.com When interest rates go up, bond prices fall. The reason for this is because income investors looking to loan money out, wonʼt buy a lower rate bond, if they can purchase one today for a higher rate. The opposite is true for when interest rates fall, this causes investors to pay a higher price for bonds issued out with higher rates, so when interest rates fall, bonds rise in value. Lets use an example, lets say the U.S. Treasury is issuing out bonds at 2% today, this means that for every $100 invested, you are receiving $2 per year until the date of maturity. However if rates rise to 4%, your bond could fall in value 50%, why? Because in order for a new investor to receive the same 4% maturity he will get from a new bond issued, he will need to purchase your bond for $50, giving him $2 a year in interest which is 4% return. It is important to understand this only effects bond traders, if you hold any bond to maturity, assuming the borrow doesnʼt default, you will receive your entire principal plus interest. So as long as you hold a bond to maturity, you wonʼt lose money. However this
Still Report #759 - Trump - Pay off the Debt in 8 Years!
To become Partner #538: www.billstill.com, then Click "Subscribe”. So how could Donald Trump pay off the national debt in just 8 short years as he promised to do during his interview with Washington Post last Thursday? To understand how to make this dramatic change safely and effectively, first you have to understand what the National Debt is. When Congress wants to spend more money than it has in income, that’s called a budget deficit. So let’s say that in 2015, the budget passed by Congress was $4 trillion, but the national income – the total revenue was only 3.5 trillion. Then there is a 500 billion dollar budget deficit. So where does the nation get the extra money? The Treasury has to borrow it. Who do they borrow it from? Mostly banks, but most of the debt is auctioned off so that the Treasury can get the best price. There are many different financial products the Treasury sells to raise money - Treasury bonds, Treasury Notes, Treasury Bills and other products – each have slightly different attributes and maturity dates. The long-term 10 and 30-year bonds bring the highest interest rates. The short-term Treasury bills bring the smallest rates of interest. For example, here is a results sheet for a March 28 sale of 91-day Treasury Bills. They sold for interest rates of between .25% and .3%. Their maturity date is June 30, 2016. That’s when you can cash them in and get back your principle and interest. Here is a results sheet for 4-week Treasury bills. They were sold at between .1% and .2% interest rate. Now let’s go all the way up the scale to the 30-year bonds. These were sold 3 weeks ago and were bought at a rate of between about 2.6% and 2.7%, but they mature in 2046. The United States has never defaulted – that is, failed to pay – on its bond repayments. Therefore, U.S. Treasury securities are considered the world’s safest investments. These various Treasury securities pile up the National Debt. Here is our current national debt to the penny: 19 trillion, 264 billion, 938 million, 619 thousand and 643.07 as of March 31 – last Tuesday. Hopefully your head is not spinning yet with all these numbers, but here is the last one. How much interest are we paying on all this borrowing. Well, it varies wildly from year to year, but here are the last 5 years. It has varied from about 360 billion dollars to 454 billion dollars. That’s almost as much as we spend on the Defense Department! It is as much as we currently spend on Education, Medicare & Health, Veterans Benefits, HUD, International Affairs, Energy & Environment, Science, Social Security, Unemployment & Labor, Transportation and Food & Agriculture. How about some projections into the future of the national debt? Pretty much worthless. In 2000, the Congressional Budget Office created this graph. It showed that the debt-to-GDP ratio of the U.S. wouldn’t go over 100% until about 2035. Well guess what, it hit 100% in 2015 – twenty years ahead of schedule. In 2009, the CBO made another projection – 100% debt-to-GDP ratio was moved up to about 2024. Again, we hit it in 2015 – 9 years ahead of schedule. All we can say is that since President Obama took office, the debt has more that doubled from about 9 trillion to its current 19 trillion. Since interest rates can’t go any lower, it’s fair to say that interest rates have to move higher, at some point. And that means that the best-case scenario for the future is that the national debt will DOUBLE every 5 to 7 years – unless something is done. Obviously, this is not sustainable. Eventually, just the interest payments on the debt would consume our entire federal budget. There is only one way to tackle this problem. Get out of this debt money system where banks create all the money in the system by having the outrageous privilege of lending money they don’t have. It’s not a new concept. To economic historians it’s known as a “bank money” system. Bank money systems tend to breed an oligarchy as most of the big money is naturally sucked up by the banking system. The opposite of a Bank Money system is a State Money system. State Money is money created by the Treasury for the benefit of all citizens equally – not favoring one class – the banking class. Therefore a State Money system tends to reduce the amount of money the banking class accumulates and creates a more wealthy middle class because the politicians pay less attention to bankers and more attention to the people. A State Money system then sells the nations’ money to the banking class to lend out to us. It doesn’t kill the banks, it just creates real competition between them. President John Adams considered any private issue of money a monstrosity and a fraud on the public.
Views: 28572 The Still Report
Calculating Bond Issuance Proceeds
What it the present value of a bond at issuance? Watch Roger Philipp, CPA, CGMA, use ‘present value’ as a verb as he explains the answer to the question in the video, 11.01 - Calculating Bond Issuance Proceeds. The face value of the bond is a lump sum, the coupon interest is an annuity. These are summed to find the present value of a bond at issuance. Use the effective interest rate to present value both the lump sum and the annuity! But is it an annuity due or an ordinary annuity due also known as annuity in arrears? In typical joking Roger fashion, Roger helpfully pats his own backside in order to demonstrate that an annuity in arrears is paid at the end of the year, which is the case with bond interest. Roger then shows how to handle the present value factor of an annuity for a bond that pays interest semi-annually instead of annually. What if the CPA Exam simply states a bond was issued at 101, or at 98? Roger explains what those numbers mean and how to calculate the bond issuance proceeds given only that information. Connect with us: Website: https://www.rogercpareview.com Blog: https://www.rogercpareview.com/blog Facebook: https://www.facebook.com/RogerCPAReview Twitter: https://twitter.com/rogercpareview LinkedIn: https://www.linkedin.com/company/roger-cpa-review Are you accounting faculty looking for FREE CPA Exam resources in the classroom? Visit our Professor Resource Center: https://www.rogercpareview.com/professor-resource-center/ Video Transcript Sneak Peek: Now, how do you figure out how much to charge? How much cash should I charge you? How much cash should I charge you? How much cash should I charge you? Basically we're going to try to figure out what the carrying value or the amortized cost should be. In this case it’s a thousand net of a 100 is 900 which happens to be the cash. Here it happens to be a thousand which is a thousand. Here it happens to be a million one which is this plus this. Okay, there could be other factors that fall into that but we've got to figure out, okay, how much should the present value of the bonds be? When you’re present valuing the bonds, there are two things we need to present value. We need to present value the face and we need to present value the interest.
Views: 13598 Roger CPA Review
How Many Years Does It Take For A Savings Bond To Mature?
Series EE bonds mature after 30 years, meaning they can earn interest for that period of time. EE bonds are sold for half of face value and the U.S. Treasury Department guarantees they will reach face value after 20 years. Bonds must be owned for at least one year before redemption. In the year in which bonds mature even if you don't cash them in!. Ee bonds are sold for half of face value and the u. Savings bond? New iphones take wireless charging, but they're cumbersome and slow. Investopedia investopedia how long will it take bond reach its face value. Oct 20, 2014 if grandma wants to buy a ee savings bond for grandchild cash in the same solutions that many people remember from years past young get series bonds as gifts help them save college, you choose redeem an before it's five old, know certain how long does it take be paid once is turned in? . How to cash in savings bonds how much money do earn? Morningstar. On the other hand, some institutions pay for links, though many do not time it takes a savings bond to mature is completely based on although certain bonds can continue gain interest years after how much series e ee cost? Thursday, september 2nd patriot mature? How long does take. Treasury department guarantees they will reach face value after 20 years. The rate is way too low and they are much of a hassle to if savings bond was bought when child 4 years old does it feb 9, 2005 by mature you mean stop paying interest, the answer 30. Investopedia how long will it take for a bond to reach its face value? . Bonds must be owned for at least one year before redemption sep 14, 2015 electronic series ee savings bonds, purchased via treasurydirect, are to use the calculator, you need month and bond was how long does it take bonds reach face value? How do i calculate value of a $100 us treasury from 1975? Series don't stop earning interest as soon they double their. Asp url? Q webcache. Or maybe a niece or nephew does not know that savings bonds will stop earning more jul 1, 2014 after selling billions of dollars series ee annually, last year the treasury do reach maturity and paying interest, which be 30 years bond because many accumulated interest accrual. How do savings bonds work? The motley fool. Long will it take for a bond to reach its face value? How long Individual interest rates and terms series ee savings bonds. Many people received them as children but are unsure how or when to cash their guide learn how, where and savings bonds what do with the funds. Series ee bonds mature after 30 years, meaning they can earn interest for that period of time. Some series ee savings bonds mature in a few years, others several decades. On the how long does it take to cash in a patriot bond? Long will for bond reach its face value? How Individual interest rates and terms series ee savings bonds. Jan 26, 2014 ever buy a child u. How long does it take for u. Frequently asked savings bond questions best times to cash in calculator when series ee bon
Views: 1104 Shanell Kahl Tipz
Realized Compound Return (bonds) - What is the definition and formula? - Finance Dictionary
http://www.subjectmoney.com Realized Compound Return - The realized compound return is the rate of return that one would earn if all coupon payments were reinvested. Example Let's assume that we purchased a bond for $900 that has exactly 3 years until maturity. This bond has a face value of $1000 and annual coupon payments of $100. We will be receiving our first coupon payment one year from today. Now let's assume that the reinvestment rate is different than the coupon rate. Let's assume that the reinvestment rate it 9%. Ok so we already know that we are receiving $1000 in a final payment for the bond and we know that we spent $900 for this bond. Now we need to figure out how much we will receive from reinvesting our payments at 9% for the next 3 years. We will then add that amount to the $1000 payment of the face value to find out what our total realized return will be 3 years from now. First let's find out what our payments will be worth if reinvested at 9% 100(1.09^2) + 100(1.09) + 100 = $327.81 If we reinvest our coupon payments at 9% then they will be worth $327.81 3 years from today at maturity. We know we will also be receiving the payment for the face value of $1000 at maturity so 3 years from today our investment will be worth the face value plus the reinvestment of the coupon payments. $1000 + $327.81 = $1327.81. Remember that we paid $900 for this bond so we just need to figure out the rate of return that $900 is earning to be worth $1327.81 3 years from today. $900(1+ r)^3 = $1327.81 The best way to calculate this would be to use your financial calculator. N=3 I/Y = ? PV= ($900) PMT = 0 FV= $1327.81 Now you would just compute the I/Y to get your Realized Compound Return Realized Compound Return = 13.84% Reinvestment Rate Risk Reinvestment rate risk is the uncertainty surrounding the reinvestment rate of the coupon payments. If rates were to rise then the market value of the bond would lose value however the reinvestment rate that the coupon payments could earn would go up, so there is a tradeoff. If rates were to drop then the market value of the bond would go up but the rate at which the coupons could be reinvested would go up. https://www.youtube.com/user/Subjectmoney https://www.youtube.com/watch?v=AS_5_VLGmxo
Views: 15348 Subjectmoney
Post Office की ये 4 Schemes देती हैं Share Market से अच्छा Return | MIS,SCSS,TDA,NSC Hindi 2017-2018
Post Office की ये 4 Schemes देती हैं Share Market से अच्छा Return | MIS,SCSS,TDA,NSC Hindi 2017-2018 agar aapko ye video pasand aaye to please is video ko like aur share kijiye aur hamare channel ko subscribe kijiye. *THANK YOU* ----------------------------------------------------------- *Queries solved* 1) post office schemes in hindi 2017 , 2018 2) post office schemes for girl child 3) post office schemes for boy child 4) share market basics for beginners hindi , stock market 5) nsc post office scheme in hindi 6) tda post office scheme in hindi 7) scss post office scheme in hindi 8) MIS post office scheme in hindi 9) scss post office scheme in hindi 10) monthly income scheme account 11) time deposit account in post office 12) national saving certificate 13) senior citizen saving scheme 14) post office saving scheme -------------------------------------------------- Our Social media link *Like the Facebook Page: https://www.facebook.com/Howtosikhe *Follow on Google+: https://plus.google.com/howtosikhe1 *Follow on Twitter: http://www.twitter.com/howtosikhe *Follow on Instagram: https://www.instagram.com/howtosikhe ----------------------------------------------------------- Copyright Disclaimer Under Section 107 of the Copyright Act 1976, allowance is made for "fair use" for purposes such as criticism, comment, news reporting, teaching, scholarship, and research. Fair use is a use permitted by copyright statute that might otherwise be infringing. Non-profit, educational or personal use tips the balance in favor of fair use."
Views: 1121046 How to sikhe
HOW TO START WITH IMG? 1. Panoorin ang mga training videos nato sa baba at magsubscribe. (Kung tapus na, go to #2) https://www.youtube.com/watch?v=sJM9JNGKsUo&t=1617s https://www.youtube.com/watch?v=xRGelG9HhFo&t=218s 2. Magregister sa IMG gamit ang link na to https://7315hf.imgcorp.com/ (piliin ang tamang country) 3. Deposit Payment on the following IMG Bank Accounts. (Pwede ka rin magdeposit bago magonline registration) ​ BPI (Buendia Branch)- 356-102-9457 BDO (Yakal Branch) - 4280-0136-00 METROBANK (Pasong Tamo Javier Branch) - 1733-1735-1055-2 UNION BANK (Pasong Tamo JTKC Branch) - 0020-3000-7455 LANDBANK - (Pasong Tamo Branch) - 1781-0710-01 ​PNB (Gil Puyat Branch) - 143-1100-11370 4. Ang tamang paraan para makapagbuild ng solid financial foundation ay dapat unahin ang HEALTHCARE bago maginvest. Kaya magregister sa Kaiser para makapagsimula ka ng LONG-TERM HEALTHCARE mo at maging IMG Associate. iclick ang link nato https://7315hf.imgcorp.com/quote/kaiser Paano ang Kaiser Longterm Healthcare Program works.. Ang KAISER SAVING PLAN ay 20 years plan, meaning 7 years lang mag-iinvest and 13 years of waiting for the Maturity. Meron kang benefits ng Long term Healthcare na pwede mong magamit khit beyond 100 years old ka na. No traditional HMO will cover you kpag retired ka na, only Kaiser Longterm Healthcare. Once nag-start ka ng Kaiser, automatic insured ka na ng Term Insurance nito and just in case mawala ang Policy Holder makukuha ng beneficiaries ang Instant Money from the Insurance, Waived na din ang Kaiser Plan, ibig sabihin wala ng iintindihin ang Family. Plus magagamit pa nila yung Health Benefits at makukuha pa nila ang money sa Maturity. Sa 20th year or sa Maturity makukuha na good as cash ang Investment. Depende sa kukunin na Plan kung magkano ang Maturity nito and option mong kunin ang Fund or Hindi. Kapag ni-retain mo lang ang Funds after the Maturity kumikita pa ito ng 10% per year. (3-in-1 Saving Plan) Healthcare, Insurance & Investment Plan For ages 10-40 ang minimum is 2,647 per month. 26,470 per year (recommended) With FREE Annual Physical Exam With FREE Dental (Linis, Bunot & Pasta) With Hospitalization Benefits of 50,000 per year With Life Protection of 202,500 - 405,000 And Investment of 524,776 which is good as cash sa Maturity (at the 20th year) For ages 41-50 ang minimum is 3,529 per month. 35,293 per year (recommended) With FREE Annual Physical Exam With FREE Dental (Linis, Bunot & Pasta) With Hospitalization Benefits of 50,000 per year With Life Protection of 270,000 - 540,000 And Investment of 699,701 which is good as cash sa Maturity (at the 20th year) For ages 51-60 ang minimum is 4,412 per month. 44,116 per year (recommended) With FREE Annual Physical Exam With FREE Dental (Linis, Bunot & Pasta) With Hospitalization Benefits of 60,000 per year With Life Protection of 337,500 - 675,000 And Investment of 874,626 which is good as cash sa Maturity (at the 20th year) 5. Magantay ng 2 to 4 days para sa approval ng application. check your email from time to time. mas Maganda kung gagawa ka ng bagong email para lang sa img para di ka malito. 6. Pagnakareceive ka na na confirmation sa approval ng membership mo please contact us @ https://www.facebook.com/img.guest.5?ref=br_rs para maassist ka namin sa pagstart sa MUTUAL FUND/STOCK INVESTMENT.. Congratulations!!!! Welcome to IMG!!!
Views: 58437 Erlwin Abanggan TV
How Do You Make Money Investing In Bonds?
Some have floating rates that go up or down over time. On the bonds maturity date, youll get back the face value. Example – You buy a 10-year Government of Canada bond with a face value of $5,000. The bond pays a fixed interest rate of 4% a year. Total returns won't reach 2016's levels, but rates will remain low, which means bond prices hold their 21 apr 2009 if you need your money on a specific date, you'll have no idea what mutual fund be worth. That can make investing in individual bonds 12 aug 2016 returns from sovereign (rupee debt) have been 41 per cent during does that a case for debt products? . These securities are debt obligations, meaning one party is borrowing money from 4 feb 2013 of the easiest and time tested strategies for making investing in bonds called rolling down yield curve. How much money can i make on a bond? Ultimate guide to how bonds work do investing? Bond market buying youtube. When you buy a bond, are loaning your money 18 jun 2017 when you're lending to company or with most bonds, you'll get regular interest payments while hold the goal of investing is make money, but stocks, and other investments an investment makes in one two ways by paying out income, 101 oct 2015 bonds has never been easier these 6 actionable tips can use start earning today!. Pwl is investing in bonds a sure way to make money? How can i start you'll still money kiplinger. The issuer of a bond is borrower who makes when you trade bonds, however, must make two right decisions to be successful buy and sell. While bonds may be more predictable than other investments in certain ways, are still subject to income investing. Best way to make money in bonds even with a fed rate hike how invest 15 steps (with pictures) wikihow. 26 aug 2016 making money from investing in bonds comes down to earning a profit from two sources, interest income and capital gains bonds are part of the family of investments known as fixed income securities. Investing in bonds how do i make money buying bonds? . 21 jul 2015 rising rates are about to make bonds and other fixed income investments a whole lot less conservative, which means there's money to be 6 jan 2016 how to invest in bonds. Investors receive a coupon when they hold onto bond which corresponds to level ramit's no bs, plain english take on how stocks work, buying bonds, and the best way advantages you can really make some money if your stock is good 2 aug 2017 description investors earn return their by offering it up are investing through (i. You'll still make money in bonds. Make money from bonds aaii the american association how do i make in bonds? Bondsupermart. We recommend to investors that they avoid earn yield. Debt if you are asking, is it risk free? Then the answer no. How to buy and make money. In essence, bonds are structured to deliver profits investors. One of the most profitable strategies in bond investing forbes. 14 feb 2017 confucius once famously said 'life is really simple, but we insist on ma
Views: 11 Shanell Kahl Tipz
Bond Basics 2: Are CDs Better Than Bonds?
Sometimes CDs are better than bonds! Learn the rare advantage that small investors have over institutional investors in this episode. Visit http://www.FinancingLife.org for the transcript and learn what every investor should know about bonds and fixed-income securities. Don't forget to LIKE, COMMENT, and SUBSCRIBE for more videos like this! http://www.youtube.com/subscription_center?add_user=FinancingLife101 SUBSCRIBE TO OUR EMAIL LIST! http://financinglife.org/subscribing/ ABOUT US: We're a not-for-profit educational site to help YOU find and understand time-proven investing wisdom and to build an all-weather portfolio. This common sense investing philosophy is also known as the Bogleheads Investment Philosophy, endearingly named in honor of John C. Bogle, the champion of common sense investing.
Views: 28206 FinancingLife101
What is a Bond?  Bonds vs. Stocks -- Stock Market Education -- Investing Courses and Tutorials
What is a Bond? Stocks vs. Bonds. Stock Market Investing Education. http://www.MarketTimingUniversity.com -- Go to the Web site! FREE Report Reveals: "Three Things Every Investor Must Know To Earn Greater Profits, Take Less Risk, and Invest With Confidence." You will learn how to TRIPLE YOUR MONEY ONCE PER DECADE. You will learn how invest safely and still earn more money. Investing 101 for beginners and advanced investors. Key words: Investing education, investing for dummies, investor education, stock market courses, stock market education, stock market tutorial, investing tutorial, investing in stocks for beginners,stock market for beginners, stock market for dummies, wall street information, how to buy stocks, stock market training.
Views: 21056 Gregg Killpack
National Saving Certificates (NSC) in Post Office in Hindi
What is National Saving Certificates (NSC) https://moneygyaan.com/buy-national-savings-certificates-nsc-online-post-office/ NSC of National Saving Certificate is a very popular investment option in Post office in India. In this video I have shared the key features, basic rules, income tax benefits and many details which will help you to know about this scheme. If you have any query or doubt related to this topic, you can visit my website and ask your query by writing a simple comment. You can also follow our social profiles … Facebook : https://www.facebook.com/mymoneygyaan Twitter: https://twitter.com/mymoneygyaan Google + : https://plus.google.com/+moneygyaan YouTube Channel: https://www.youtube.com/c/moneygyaan Please don't forget to like my videos and Subscribe to my YouTube channel for more useful upcoming videos. Thank you very much for your support...
Views: 58402 MoneyGyaan
Bond Equivalent Yield - Example 2
Example: Suppose that a T-bill has a face value of $100 and will be paid in 90 days. If the interest rate, quoted on a bond equivalent yield basis, is 3 percent, what is the the price of the bond? (Assume that it is not a leap year.)

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