If Turkey doesn't go bankrupt, is there any chance they won't pay bonds profits?Can someone explain how government bonds work?Where to buy good corporate/goverment/treasury bonds?Can a bond's market price rise above its lifetime value?Is there any real purpose in purchasing bonds?logistical details of interest and dividend payments on assets traded on the secondary market?How can I practically buy bonds?
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If Turkey doesn't go bankrupt, is there any chance they won't pay bonds profits?
Can someone explain how government bonds work?Where to buy good corporate/goverment/treasury bonds?Can a bond's market price rise above its lifetime value?Is there any real purpose in purchasing bonds?logistical details of interest and dividend payments on assets traded on the secondary market?How can I practically buy bonds?
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Suppose I buy 5000$ worth of Turkish treasury bonds today and the yearly interest rate for 1Y bonds is roughly 25%. Assuming Turkey doesn't go bankrupt in the next year, is there any chance I won't get 5000$+1250$ back?
I don't understand whether a country can postpone interest payments, or I will certainly get my profit back on time.
bonds interest yield treasury
asked 11 hours ago
DamiTomaDamiToma
1113
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DamiToma is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
add a comment |
Suppose I buy 5000$ worth of Turkish treasury bonds today and the yearly interest rate for 1Y bonds is roughly 25%. Assuming Turkey doesn't go bankrupt in the next year, is there any chance I won't get 5000$+1250$ back?
I don't understand whether a country can postpone interest payments, or I will certainly get my profit back on time.
bonds interest yield treasury
asked 11 hours ago
DamiTomaDamiToma
1113
New contributor
DamiToma is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
What is the face value of the bonds, especially, in what currency? There's a non-trivial chance that 100% of face value in Lira you get next year is worth less in US Dollars next year than 80% of face value in Lira that you can buy them for today is worth today.
– Ben Voigt
11 hours ago
@BenVoigt Honestly I'm pretty new to the subject... My currency is EUR, I'm looking at turkish bonds because I've seen their rates are extremely high but I don't understand them totally, so I don't know what the face value is. I just want to understand if I'm surely going to get around 25% profit back, assuming the country doesn't fail.
– DamiToma
11 hours ago
Yes.. if the patient doesn't die, the patient will live
– sofa general
8 hours ago
add a comment |
Suppose I buy 5000$ worth of Turkish treasury bonds today and the yearly interest rate for 1Y bonds is roughly 25%. Assuming Turkey doesn't go bankrupt in the next year, is there any chance I won't get 5000$+1250$ back?
I don't understand whether a country can postpone interest payments, or I will certainly get my profit back on time.
bonds interest yield treasury
asked 11 hours ago
DamiTomaDamiToma
1113
New contributor
DamiToma is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
Suppose I buy 5000$ worth of Turkish treasury bonds today and the yearly interest rate for 1Y bonds is roughly 25%. Assuming Turkey doesn't go bankrupt in the next year, is there any chance I won't get 5000$+1250$ back?
I don't understand whether a country can postpone interest payments, or I will certainly get my profit back on time.
bonds interest yield treasury
bonds interest yield treasury
asked 11 hours ago
DamiTomaDamiToma
1113
New contributor
DamiToma is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 11 hours ago
DamiTomaDamiToma
1113
New contributor
DamiToma is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 11 hours ago
DamiTomaDamiToma
1113
New contributor
DamiToma is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
asked 11 hours ago
DamiTomaDamiToma
1113
asked 11 hours ago
DamiTomaDamiToma
1113
1113
New contributor
DamiToma is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
New contributor
DamiToma is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
What is the face value of the bonds, especially, in what currency? There's a non-trivial chance that 100% of face value in Lira you get next year is worth less in US Dollars next year than 80% of face value in Lira that you can buy them for today is worth today.
– Ben Voigt
11 hours ago
@BenVoigt Honestly I'm pretty new to the subject... My currency is EUR, I'm looking at turkish bonds because I've seen their rates are extremely high but I don't understand them totally, so I don't know what the face value is. I just want to understand if I'm surely going to get around 25% profit back, assuming the country doesn't fail.
– DamiToma
11 hours ago
Yes.. if the patient doesn't die, the patient will live
– sofa general
8 hours ago
add a comment |
What is the face value of the bonds, especially, in what currency? There's a non-trivial chance that 100% of face value in Lira you get next year is worth less in US Dollars next year than 80% of face value in Lira that you can buy them for today is worth today.
– Ben Voigt
11 hours ago
@BenVoigt Honestly I'm pretty new to the subject... My currency is EUR, I'm looking at turkish bonds because I've seen their rates are extremely high but I don't understand them totally, so I don't know what the face value is. I just want to understand if I'm surely going to get around 25% profit back, assuming the country doesn't fail.
– DamiToma
11 hours ago
Yes.. if the patient doesn't die, the patient will live
– sofa general
8 hours ago
What is the face value of the bonds, especially, in what currency? There's a non-trivial chance that 100% of face value in Lira you get next year is worth less in US Dollars next year than 80% of face value in Lira that you can buy them for today is worth today.
– Ben Voigt
11 hours ago
What is the face value of the bonds, especially, in what currency? There's a non-trivial chance that 100% of face value in Lira you get next year is worth less in US Dollars next year than 80% of face value in Lira that you can buy them for today is worth today.
– Ben Voigt
11 hours ago
@BenVoigt Honestly I'm pretty new to the subject... My currency is EUR, I'm looking at turkish bonds because I've seen their rates are extremely high but I don't understand them totally, so I don't know what the face value is. I just want to understand if I'm surely going to get around 25% profit back, assuming the country doesn't fail.
– DamiToma
11 hours ago
@BenVoigt Honestly I'm pretty new to the subject... My currency is EUR, I'm looking at turkish bonds because I've seen their rates are extremely high but I don't understand them totally, so I don't know what the face value is. I just want to understand if I'm surely going to get around 25% profit back, assuming the country doesn't fail.
– DamiToma
11 hours ago
Yes.. if the patient doesn't die, the patient will live
– sofa general
8 hours ago
Yes.. if the patient doesn't die, the patient will live
– sofa general
8 hours ago
add a comment |
2 Answers
2
active
oldest
votes
You're contemplating paying 30,000 lira ($5000 US or 4400 EUR) today for bonds with a face value of 37,500 lira. If Turkey doesn't go bankrupt, in one year the bonds will pay out 37,500 lira.
If you had 37,500 lira today, that would be worth $6175 US or 5500 EUR. But you won't have 37,500 lira at today's exchange rate, you'll have it at next year's exchange rate. Which the market strongly believes is going to be much worse than today's exchange rate; that's the main reason why the bonds are selling at a 20% discount from par value today.
answered 11 hours ago
Ben VoigtBen Voigt
3,90321621
Very clear, thanks!
– DamiToma
11 hours ago
add a comment |
The Turkey overnight bank rate is 24%. That means that a leveraged forex currency position would receive daily rollover interest at about a 23.25% annual-rate after commissions. Of course the forex position doesn't have to use leverage.
The one-year bond can be a bet that interest rates will go down because the bond goes up if interest rates go down. However, a one-year bond is just one-year to redemption.
The currency might go up, or most likely would just hold, if interest rates went up. The interest rates are predicted to come down slightly.
answered 1 hour ago
S SpringS Spring
97913
add a comment |
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2 Answers
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2 Answers
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You're contemplating paying 30,000 lira ($5000 US or 4400 EUR) today for bonds with a face value of 37,500 lira. If Turkey doesn't go bankrupt, in one year the bonds will pay out 37,500 lira.
If you had 37,500 lira today, that would be worth $6175 US or 5500 EUR. But you won't have 37,500 lira at today's exchange rate, you'll have it at next year's exchange rate. Which the market strongly believes is going to be much worse than today's exchange rate; that's the main reason why the bonds are selling at a 20% discount from par value today.
answered 11 hours ago
Ben VoigtBen Voigt
3,90321621
Very clear, thanks!
– DamiToma
11 hours ago
add a comment |
You're contemplating paying 30,000 lira ($5000 US or 4400 EUR) today for bonds with a face value of 37,500 lira. If Turkey doesn't go bankrupt, in one year the bonds will pay out 37,500 lira.
If you had 37,500 lira today, that would be worth $6175 US or 5500 EUR. But you won't have 37,500 lira at today's exchange rate, you'll have it at next year's exchange rate. Which the market strongly believes is going to be much worse than today's exchange rate; that's the main reason why the bonds are selling at a 20% discount from par value today.
answered 11 hours ago
Ben VoigtBen Voigt
3,90321621
Very clear, thanks!
– DamiToma
11 hours ago
add a comment |
You're contemplating paying 30,000 lira ($5000 US or 4400 EUR) today for bonds with a face value of 37,500 lira. If Turkey doesn't go bankrupt, in one year the bonds will pay out 37,500 lira.
If you had 37,500 lira today, that would be worth $6175 US or 5500 EUR. But you won't have 37,500 lira at today's exchange rate, you'll have it at next year's exchange rate. Which the market strongly believes is going to be much worse than today's exchange rate; that's the main reason why the bonds are selling at a 20% discount from par value today.
answered 11 hours ago
Ben VoigtBen Voigt
3,90321621
You're contemplating paying 30,000 lira ($5000 US or 4400 EUR) today for bonds with a face value of 37,500 lira. If Turkey doesn't go bankrupt, in one year the bonds will pay out 37,500 lira.
If you had 37,500 lira today, that would be worth $6175 US or 5500 EUR. But you won't have 37,500 lira at today's exchange rate, you'll have it at next year's exchange rate. Which the market strongly believes is going to be much worse than today's exchange rate; that's the main reason why the bonds are selling at a 20% discount from par value today.
answered 11 hours ago
Ben VoigtBen Voigt
3,90321621
edited 11 hours ago
answered 11 hours ago
Ben VoigtBen Voigt
3,90321621
answered 11 hours ago
Ben VoigtBen Voigt
3,90321621
answered 11 hours ago
Ben VoigtBen Voigt
3,90321621
3,90321621
Very clear, thanks!
– DamiToma
11 hours ago
add a comment |
Very clear, thanks!
– DamiToma
11 hours ago
Very clear, thanks!
– DamiToma
11 hours ago
Very clear, thanks!
– DamiToma
11 hours ago
add a comment |
The Turkey overnight bank rate is 24%. That means that a leveraged forex currency position would receive daily rollover interest at about a 23.25% annual-rate after commissions. Of course the forex position doesn't have to use leverage.
The one-year bond can be a bet that interest rates will go down because the bond goes up if interest rates go down. However, a one-year bond is just one-year to redemption.
The currency might go up, or most likely would just hold, if interest rates went up. The interest rates are predicted to come down slightly.
answered 1 hour ago
S SpringS Spring
97913
add a comment |
The Turkey overnight bank rate is 24%. That means that a leveraged forex currency position would receive daily rollover interest at about a 23.25% annual-rate after commissions. Of course the forex position doesn't have to use leverage.
The one-year bond can be a bet that interest rates will go down because the bond goes up if interest rates go down. However, a one-year bond is just one-year to redemption.
The currency might go up, or most likely would just hold, if interest rates went up. The interest rates are predicted to come down slightly.
answered 1 hour ago
S SpringS Spring
97913
add a comment |
The Turkey overnight bank rate is 24%. That means that a leveraged forex currency position would receive daily rollover interest at about a 23.25% annual-rate after commissions. Of course the forex position doesn't have to use leverage.
The one-year bond can be a bet that interest rates will go down because the bond goes up if interest rates go down. However, a one-year bond is just one-year to redemption.
The currency might go up, or most likely would just hold, if interest rates went up. The interest rates are predicted to come down slightly.
answered 1 hour ago
S SpringS Spring
97913
The Turkey overnight bank rate is 24%. That means that a leveraged forex currency position would receive daily rollover interest at about a 23.25% annual-rate after commissions. Of course the forex position doesn't have to use leverage.
The one-year bond can be a bet that interest rates will go down because the bond goes up if interest rates go down. However, a one-year bond is just one-year to redemption.
The currency might go up, or most likely would just hold, if interest rates went up. The interest rates are predicted to come down slightly.
answered 1 hour ago
S SpringS Spring
97913
answered 1 hour ago
S SpringS Spring
97913
answered 1 hour ago
S SpringS Spring
97913
answered 1 hour ago
S SpringS Spring
97913
97913
add a comment |
add a comment |
DamiToma is a new contributor. Be nice, and check out our Code of Conduct.
DamiToma is a new contributor. Be nice, and check out our Code of Conduct.
DamiToma is a new contributor. Be nice, and check out our Code of Conduct.
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What is the face value of the bonds, especially, in what currency? There's a non-trivial chance that 100% of face value in Lira you get next year is worth less in US Dollars next year than 80% of face value in Lira that you can buy them for today is worth today.
– Ben Voigt
11 hours ago
@BenVoigt Honestly I'm pretty new to the subject... My currency is EUR, I'm looking at turkish bonds because I've seen their rates are extremely high but I don't understand them totally, so I don't know what the face value is. I just want to understand if I'm surely going to get around 25% profit back, assuming the country doesn't fail.
– DamiToma
11 hours ago
Yes.. if the patient doesn't die, the patient will live
– sofa general
8 hours ago