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A bondholder is the owner of a bond. It may have been purchased in the secondary market.

The Bank of Japan effectively endures that the Japanese government can issue new bonds near its policy rate. … The ECB let Greek bonds yields to decouple from other euro bond yields, which forced the Greek government to default. …

It is very difficult to explain why financial market prices change. Theoretically, you would need to get honest answers from all market participants as to what their strategies are - and no sensible m …

If new long-duration bonds are added to the index and lose money, those losses could be larger than the pull-to-par effect on existing bonds. So yes, it is possible to generate capital losses. … Most bond indices drop bonds when they hit one year to maturity. If the curve is inverted, there could be capital losses that are only recouped after the bond leaves the index. …

The approximation given is off at a key point - it is the duration of the bond at 9 years maturity, not the original duration. The approximation works in two steps. If the yield is unchanged over o …

The yield-to-maturity is similar to an internal rate of return, so the calculations need to take into account the timing of cash flows. So your example calculation 10%/.90 = 11.11% does not work. (Tha …

For example, the “10-year Treasury bond” yield shown on the website is going to be close to the the market yields of Treasury bonds/notes that are near a 10-year maturity, but there are spreads between …

There is a fair amount of ambiguity to this question. The first question is: what is the yield curve? A fixed income investor may refer to the yields across all maturities as the yield curve, while ec …

That is, for bonds, price up -> yield down (and vice versa). (The only tricky bit is that the coupon is not known until the auction concludes.) For a discussion of U.S. … Not all bonds are issued via an auction process (one alternative is “tapping” issues). Sweden is an example of using a multi-price auction - link to Swedish auction description. …

The entry “offering amount” is the total par value that is being auctioned. (In the example given, this is a reopening of an existing issue, so it is the increase of par value for the issue.) From th …

As originally written, parts of the question are unclear. We do not normally calculate the government debt of two countries together, they are calculated independently. Adding up debts across countrie …

The tricky part of this question is that it does not specify that we are on a coupon date. If we are away from a coupon date, we normally assume that if we say that a bond “is trading at a discount”, …

The “limit” is the inability to float bonds in the bond markets. … The only limit is what it can get from auctioning bonds to investors. …

Vanilla bonds with the same maturity and coupon are effectively identical, but this is not true for two amortisers with different maturity dates. … One added note is that straight amortising bonds have a very low duration relative to a bullet principal payment. …

The first statement is a result from an old economic model. The two views can be reconciled by the following argument: the central bank is constrained by the structure of the economy as to its choice …