Why yields go down when prices go up. Created by Sal Khan.
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Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy.
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Not sure how you can acquire 5 percent returns if the govt isnt printing 5 percent more money or the banks arent printing it through lending. Or maybe through FDI. The money could come from taxes. But people hate paying taxes and incomes would fall every year if money was siphoned ever year to pay off foreign banks. It cant come from trade surpluses. america doesnt post any. Cant be from american corporate profits abroad. Because america posts negative current account balances. So I can only imagine the money comes from printing money and foreign investment in exchange for american assets. So this might benefit individuals from foreign countries. But it doesnt benefit foreign nation states. Since the assets are largely useless geopolitically.
Lending 950 dollars to get 1000 dollars over the course of 1 year, is a 5% yearly performance, meaning about 0,42 monthly performance. I think that if people want to get into this kind of stuff, they should learn some trading basics, be it FOREX, stocks, futures, whatever. 5% yearly performance is easily achievable even for a beginner.
us military is weak. If you had a strong military. You wouldnt even need to borrow from foreign banks. You would just force countries to pay tribute. There would be no debtor status. Mafia bosses and loan sharks go around breaking legs when people cant pay up. Not the other around
He actually complicated things in the example at 2:30. Its 5.26%. He rounded it up.
Just divide the gain of $50 by the face value of ($950) and you will get (0.0526). The yeild is often in percentage. To get it, multiply it by (100) and you will get (%52.6).
January 19, 2018: "The threshing floors will be full of grain, and the vats will overflow with the new wine and oil. Then I will make up to you for the years that the swarming locust has eaten, the creeping locust, the stripping locust and the gnawing locust, my great army which I sent among you. You will have plenty to eat and be satisfied and praise the name of the LORD your God, who has dealt wondrously with you; then my people will never be put to shame." Joel 2:25 KATE
this video was informative but seems to be over complicating things. please someone correct me if im wrong. Forget all the percent and yield information. i give the government 950 and the promise to give me 1000. 50 dollar in profit. what benift do i have of doing this? why would anyone do this am i missing something. please explain thank you because i can make more of a return with a 12 month Cd at a bank.
C4C - stop investing in us bonds. dubai is the present. usa economy is doomed. the new president will surely attempt to stimulate the economy however it will be short lived.
take a look at what is going on in dubai.
+Lonnie Atterbury Investors buy bonds in scales. A 5% yeild (50 bucks return for every ($1000) is amazing. One hundred million of these bonds, get you $5M every year. But who have this money?
Americans often put their money in mutual funds to pool their investments and create scale. The investor who tooy your money will buy these bonds which are traded in the market but the government can sell you directly at a minimum of 5 millions of these bonds in auctions that happen several time every year.
Its just one safe bet to put your money if you don't want to go into riskier investments. Higher rewards come with higher risk. But people with say an extra 20 mil lying around and they don't know where to put the money investment wise, compared to letting the money lose value in a checking/savings acct they can buy treasury bonds and get that type of % back guaranteed. Thats the whole idea, it's just a tool. You use the proper tool for investment returns you are looking for. Say you wanted to just live off the interest (boring I know) but if you had 10mil lets say you get a 3% return thats 300k before taxes etc... just something to think about. I mean I wouldn't spend all that money just buying tbills. Depending on my age, financial situation, risk appetite I'd diversify into stocks, index funds etc.
Correct me if I'm wrong but I thought treasury bills mature at 1 year or less, treasury notes mature between 1 - 10 years and treasury bonds mature at over 10 years... Why is the title treasury bond and then he talks about a 1 year maturity. I'm confused :(
Rothschild and his Jewish buddies murdered our for-Fathers on the Titanic 1912 that were against the establishment of the FED which gave the Satanist Jews a bottomless Ocean of phony cash to train non-Jewish militarists to go and murdering innocent non-Jewish people all over the world because the lying Jewish Medias labels them Theorists. Support our troops? Using phony money as value of exchange? Phony money that is used to kill all non-Jews? Force your eyes open!!! And do not use phony money as value of exchange!!! See how we are enslaved as Police, Militarists to dance to the Jewish Phony money. Committing genocide to non-Jews is the Jewish aim. Save the children!!!
And pass it on!!!
Not necessarily unsustainable. What's unsustainable is having a large debt to GDP ratio. If an economy has growth then borrowing matching that growth isn't really a problem as long as debt to GDP-ratios stay in control.
The government needs money for whatever billion dollar projects, departments, and wars they need to finance, so they simply borrow the money from "investors" at interest. What you and I would call a contract for repayment, the government calls bonds. It's just wordplay.
This puts the government in debt.
What happens when the investors want their money back and the government is only in MORE dept than before? Either print money (inflation) or borrow to put printing off until later. Unsustainable.
Although foreigners may now invest in A-shares, there is a monthly 20 percent limit on repatriation of funds to foreign countries.
Performance of A-shares.
Since its inception in 1990, including a major reform in 2002, the index has seen great fluctuations. Overall, however, it has grown along with the Chinese economy. The years 2015 to 2016 were a particularly difficult period, with a 52-week performance of -21.55 percent as of July 20, 2016.
As China grows from an emerging market to an advanced economy, there is substantial demand for Chinese equity. Stock exchange regulators continue efforts to make A-shares more broadly available to foreign investors and have them recognized by the global investing community.
In June 2017, the MSCI Emerging Markets Index announced a long-awaited decision it would add stocks to its index. According to CNBC, MSCI will add 222 China A Large Cap stocks to its benchmark emerging markets index gradually beginning in 2018. The MSCI website reveals the stocks it will list include the Bank of China, China Merchants Bank, Guotai Junan, Ping An Insurance, according to a document on Tsingtao Brewery, SAIC Motor, Suning Commerce and Spring Airlines.
Current Dividend Preference.
Participating Preferred Stock.
Convertible Preferred Stock.
Cumulative preferred stock includes a provision that requires the company to pay preferred shareholders all dividends, including those that were omitted in the past, before the common shareholders are able to receive their dividend payments.
Non-cumulative preferred stock does not issue any omitted or unpaid dividends. If the company chooses not to pay dividends in any given year, the shareholders of the non-cumulative preferred stock have no right or power to claim such forgone dividends at any time in the future.
Participating preferred stock provides its shareholders with the right to be paid dividends in an amount equal to the generally specified rate of preferred dividends, plus an additional dividend based on a predetermined condition. This additional dividend is typically designed to be paid out only if the amount of dividends received by common shareholders is greater than a predetermined per-share amount. If the company is liquidated, participating preferred shareholders may also have the right to be paid back the purchasing price of the stock as well as a pro-rata share of remaining proceeds received by common shareholders.
Significance to Investors.