GSEC 10 Year Yield

Here’s the cash-flow associated with investing in this tomorrow and holding it till maturity (Opportunity 3 below).

23-10-2026 :  -93.85
22-04-2027 :   +3.67
22-10-2027 :   +3.67
    ...
<Interest received in 2 semi-annual instalments each year>
    ...
22-04-2063 :   +3.67
22-10-2063 :   +3.67
22-04-2064 : +103.67

In other words,

  • (7.34 / 93.85) = interest at the rate of +7.821% per year, paid-out in instalments every 6 months.
  • (100 - 93.85) / 93.85 = 6.55% over 37.5 years = gain at the rate of +0.174% per year, paid out at the end.

Can apply the same logic and calculate for other bonds being considered, to compare/decide. :slight_smile:


A previous discussion.

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