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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Bearcatbob who wrote (301116)	4/15/2009 3:01:41 PM
From: ManyMoose	Read Replies (1) \| Respond to of 793964

Suppose I have a bond I bought at 2.9%, and you have one that you bought at 15% after the schist hit the fan. Would you trade with me? The NPV of yours is less than mine, right? Because if both pay off ten grand at the end of the period, you would have had to pay less for yours because your rate is higher. Maybe you would have to give me three bonds for my one. Presumably the market would equalize the two, but how does that work? Serious question. I understand the math, but not the market. I'm off to the tea party. Because I do understand that.