Bond Newbie Questions

Discussion in 'Ask any question!' started by djv, Mar 28, 2020.

  1. djv

    djv New Member

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    Hello and thank you for visiting this disucssion,
    I am interested in investing in UK GILTS

    1)I want to invest 10,000 on UK Gilts 10 Year
    According to bloomberg, coupon is 4.75%
    So, 10000*4.75% = 475
    I think gilts pay coupons every six months
    475*2 = 950
    By redemption date....
    950*10= 9500
    I will have 9500 profit ?


    What am i doing wrong here?

    2) i am assuiming i must buy it at issue date, is this date and time easily attainable information?

    Many thanks in advnace
     
  2. rg7803

    rg7803 Well-Known Member

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    Coupon is annual, if it is paid twice per year than 475/2 not 475X2...
    10 years is the maturity of that bond; if that bond was issued in 2018, and you are buying now (2020), you will have 8 years of coupon payments
     

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