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When creating PP, use face value of bonds or current market price?

Posted: Sun Jan 01, 2012 6:34 pm
by Bongleur
When creating the PP, should you use the face value of individual bonds you already own or their current market price?

Currently long bonds with a high coupon are far above their face value.

What's the minimum maturity time for bonds to satisfy the Long Treasury Bond criteria?

Re: When creating PP, use face value of bonds or current market price?

Posted: Sun Jan 01, 2012 7:02 pm
by AdamA
Bongleur wrote: When creating the PP, should you use the face value of individual bonds you already own or their current market price?

Currently long bonds with a high coupon are far above their face value.

What's the minimum maturity time for bonds to satisfy the Long Treasury Bond criteria?
It's the current market price.

Generally, you shouldn't buy a LTT that has a maturity under 25 years.  You should sell them when they reach 20 years.