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Understand buying Treasury Bond
Old 05-09-2019, 04:17 PM   #1
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Understand buying Treasury Bond


I'm interested in knowing how to read or understand what I am buying when buying a treasury bond at a brokerage.

For the example below I read it as:
matures: March 2020
pays interest of: 2.366% which is 1.625% (plus I'm buying it cheaper than $100 and counting the capital gain as interest)
The accrued interest, I'm paying this to the seller, which will make my first payment look extra big for the time I've had it.
I'm buying nine $1,000 bonds in this example.

Anything I've missed or gotten wrong ?
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Old 05-09-2019, 04:28 PM   #2
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You got it... you would be buying 9 $1,000 bonds for 99.379% or $8.944.11 (9 * $1,000 * 99.379%) plus accrued interest since you will receive the next interest payment. You get the 1.625% coupon plus a kicker from the discount for an effective yield of 2.366%.
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