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M$1.00  Funded By Mahalo ? |  March 19, 2009 02:31 PM

Is the bond market profiting from high bond prices?

The fed bought $300 billion in long term US treasuries. Yields dropped to 2.53% and bond prices climbed.

In this scenario, do bond traders profit from the increase in bond prices?

With lower yields decreases how does this affect foreign investment?
Interesting Question?  Yes (1)   No (0)   
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Best Answer  Chosen by Asker

 
March 20, 2009 02:12 AM
Is the bond market profiting from high bond prices? Yes! You can buy and sell bonds just like you do stocks. So if you purchase low, and sell high, you make a profit.

With lower yields decreases how does this affect foreign investment? Although interest rates obviously play a roll in bonds, the fact that bond prices are going up will probably mean that foreigners will still be interested in investing, even if it is at a lower interest rate.
Asker's Rating:
• FDI staying interested in the bond market was interesting.


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