OldAgePensioner
Thinks s/he gets paid by the post
- Joined
- Jun 1, 2005
- Messages
- 1,352
would be greatly appreciate. I've done a bit of homework and am still no positive I have it right. I'll give my understandings and hopefully someone will bail me out if I'm wrong.
Treasury Bond
1. Bought on the market not directly from the Gov't
2. May sell at either a discount or premium to face value, market determines.
3. Market value goes down if rates rise, and vv.
4. If I happen to buy at original face value $1000 and original interest was 4%, I get a $20 check every 6 months.
Is that correct?
Second, TIPS
1. They only differ from above by having a variable principle, tied to inflation.
So the question on TIPS is this, are they issued with lower original interest or are their yields lower because thier market value is high relative to face value?
I GOOGLED myself to a bloody pulp and could not find "Treasuries for Dummies".
Thanks
Treasury Bond
1. Bought on the market not directly from the Gov't
2. May sell at either a discount or premium to face value, market determines.
3. Market value goes down if rates rise, and vv.
4. If I happen to buy at original face value $1000 and original interest was 4%, I get a $20 check every 6 months.
Is that correct?
Second, TIPS
1. They only differ from above by having a variable principle, tied to inflation.
So the question on TIPS is this, are they issued with lower original interest or are their yields lower because thier market value is high relative to face value?
I GOOGLED myself to a bloody pulp and could not find "Treasuries for Dummies".
Thanks