4 ms·
Yes, it does matter because it means you made less money that you would have with other bonds of equal risk. That's exactly why their value goes down: They mak
by ars 4y ago
Yes, it does matter because it means you made less money that you would have with other bonds of equal risk.
That's exactly why their value goes down: They make you less money. Their value goes down exactly as much as the difference in how much money you could have made on other bonds. (i.e. you can take the loss now, in lower value, or take the loss at the end by earning less.)
- thfuran 4y ago>They make you less money. No, they make you precisely as much money as they were ever going to, with the rates fixed at issue. That some other investment strategy turns out after the fact to have been a better option doesn't change that.
- ars 4y agoTell me, would you also say this in reverse? Let's say your treasury is worth more - are you going to ask the current (higher) value, or just sell it for what you originally were going to make?
- thfuran 4y agoIn what situation are you suggesting that the US treasury is going to offer you extra money?