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Technology Stocks : Wind River going up, up, up!

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To: Pirah Naman who wrote (2436)11/20/1997 4:47:00 PM
From: Don Lloyd  Read Replies (2) of 10309
 
Pirah, <<> zero-coupon 30-year tax-free Treasury bond yielding a compound 50% per annum.

No doubt a slip due to enthusiasm, but there is a world of difference between growing 50% pa and yielding 50% pa. Not to mention that 30 years of either is certainly not guaranteed.>>
.
Be sure that you notice and understand the words 'zero coupon'. The bond principal value at maturity is what is being bought, and at a large discount.
The interest payments (coupons) have been stripped and sold to someone else. The value of the zero coupon bond does 'grow' as time passes and maturity approaches. The intervening value is additionally highly volatile as interest rates change, but at maturity the principal _is_ guaranteed by the government. (in nominal terms, not inflation adjusted -g-)

Regards, Don
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