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Strategies & Market Trends : The coming US dollar crisis
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To: carranza2 who wrote (44183)1/25/2012 6:20:11 AM
From: Real Man  Read Replies (1) of 71477
 
Investopedia has a good tutorial and a calculator. So,
you can set par equal to redemption value (say, 1000), then put
2 different numbers as "Annual rate" and "yield". For example,
if you put 1% for "Annual Rate" and 2% for "yield", you will see
what happens to JGB if Japanese interest rates rise from 1% to 2%.
Put maturity date 10 years from now to model a 10-year bond.
Links at the bottom explain the concepts. Of course, if bond trades
in a foreign currency, it's pretty obvious that someone who is
long the bond is also long the currency, provided there is no
currency hedging. The quants can sure put many layers of complexity
on chit you buy, then you have no idea what you bought and what
will influence the price! It sure helps to get that idea, at least
roughly, before buying or selling something.

investopedia.com
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