Questions about Treasury bonds (newbie)

Discussion in 'Financial Futures' started by mrbochin23, Aug 4, 2011.

  1. Hello All,
    I am newbie when it comes to Treasury Bonds, I know the basics,
    Yield and face value go opposite ways, and the fundamentals that move this two. However I have some doubts :
    1. Lets say the government put 500 million dollars in bond at a fix rate of 5.00% in the market with a expiration of 10 years, and is more demand for it and and market and face value goes up to 520 million on the total of the bonds, rate will lower let say to 4.50%, my question will be the government will receive 520 million instead?.....and if it does will it pay at 4.50% rate?.........and my other question as the interest rate fluctuates in the market, let say interest rate for that particular bond changes to 3.50% in the life time of the bond, will the government pay that interest rate, or the government is already lock to the percent they sold the bonds?

  2. yeah, the Gov is locked in. What happens after that is just between traders like you and me. So I might pay a premium for a 5% bond even though that means my yield will be less than the coupon rate.
  3. Why don't you read a book about bonds or smth?
  4. @oldtime thanks
    @Martinghoul I will.