Treasury bond prices and yields | Stocks and bonds | Finance & Capital Markets | Khan Academy

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Why yields go down when prices go up. Created by Sal Khan.
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Finance and capital markets on Khan Academy: Both corporations and governments can borrow money by selling bonds. This tutorial explains how this works and how bond prices relate to interest rates. In general, understanding this not only helps you with your own investing, but gives you a lens on the entire global economy.
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Опубликовано:

12 сен 2024

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Комментарии : 164

@TammyGrabel 3 года назад

If I could give this a thousand thumbs up I would. I have been reading and watching videos trying to understand this concept.. and FINALLY this video made it so clear to me. Thank you.

@jordiortega4436 10 месяцев назад

Same thing! :)

@CMVB92 7 лет назад

Good explanation, good pace, clear tone of voice, perfect! Thank you!

@leep3488 6 лет назад

at 1.5x speed

@sanshizer1836 4 года назад

Appreciate video content! Sorry for chiming in, I would appreciate your opinion. Have you heard about - Ponillian Intellective Position (Sure I saw it on Google)? It is a good one of a kind guide for finding government auctions near you without the normal expense. Ive heard some unbelievable things about it and my mate at very last got cool results with it.

@benscratchin8014 3 года назад

Yup, good clear explanation in layman's terms.

@yezzzsir 3 года назад

My thoughts exactly. Subbed!

@roger_rogers 13 лет назад

Love the 4 minute videos. Perfect for when I don't have time or energy to delve into science or math, I can just kick it and learn about the treasury and hedge funds!

@sheeplessingeorgianm9977 5 лет назад

Finally. I finally understand. So many thanks to you!

@DVDSA-rm6fv 8 месяцев назад

me too now is so simple...

@TerryLDawson 4 года назад

Now, that, I understand, where was this guy, when I needed him?

@Autovetus 3 года назад

My gawd you can draw such straight lines with a mouse ! Impressive !

@HafezBd Год назад

Even if bond yields are increasing while stock prices are decreasing, the markets are still skeptical whether the Federal Reserve will stick to its goal to raise interest rates until inflation is under control. While I'm still debating whether to sell my $401k worth of equities, what is the best way to profit from the present down market?

@harod033 Год назад

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@thomasweber5 Год назад

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@musak.4068 11 месяцев назад

@@thomasweber5 IGNORE THESE SCAMMERS

@blakealboyd 3 года назад

Wow this was such clear and straightforward language. Thank y’all’s 🙏🏾

@ArtHoward 3 года назад

I was confused about higher prices vs. lower yields. Now I see!

@ttijp153 3 года назад

Same here

@thebigdille Год назад

Incredible. I was looking for this explanation. Everyone else explains this without the fundamentals.

@jangofatt7135 3 года назад

Here after today's bloody day.

@CuriousChimpsPodcast 3 года назад

haha right on

@bigdick2705 3 года назад

Same lol

@pipeacosta2008 3 года назад

Same here, Thank You

@pattty847 3 года назад

im sure we would be great friends

@agf5268 3 года назад

stfu

@finarrykahn13 10 лет назад

Please continue what you do. These are the best illustrations of macroeconomic principles.

@MohammadShehzad 6 лет назад

I would be grateful if you could upload a video explaining the relationship between the dollar price, yield and gold price. It is very complex and I have failed to understand it.

@techgod3670 3 года назад

It's simple- if dollar is falling comparatively to other major currencies, investors rush to buy gold as a hedge and increase gold demand thus gold price rises. If treasury yield falls investors rush to gold, if treasury yield rises investors sell gold to cash in on the yield thus gold rate falls as more sellers are there(supply>demand) and treasury bond price rises as more investors create demand to buy.

@TravisMcGee151 Год назад

@@techgod3670 Sorry, too simple and incorrect reply. Yields are not the same in every country in the world. The price of gold is. The same is true with the strength of the dollar. Right now very strong in the U.S. ( plus and minuses on imports and exports ) never the less gold still remains the same value per ounce all over the world.

@ApartmentTrusteescom 11 лет назад

Excellent presentation ... well done!

@FRYEGS6 11 месяцев назад

I have to agree with Tammy. I understood that if I held the bond to maturity that none of this applied to my purchase. After watching this video, It is clear as day, it is the treasury that decides how much they will pay for each bond at a certain period of time and how much they will charge you for that bond. I don't get why no one who talks about bonds could not have explained that while giving us the {talk} about rates up, price down and all that jazz. Thank you Khan Academy.

@teljnyazhka 6 лет назад

Thank You sir, you are an awesome teacher

@therealreason953 4 года назад

Thank you!!! Great video. CNBC want to make it difficult to understand.

@MrJrobb182 2 года назад

I did so much research and couldn’t understand this. Thank you for breaking this down simply in only three minutes.

@j.a.h.a.l.a 3 года назад

You can buy Treasury bonds directly from the U.S. Treasury or through a bank, broker, or dealer.

@Kuziai 11 лет назад

LoL AT LAST I UNDERSTOOD :D thank you

@jonhoward4884 2 года назад

Thank you, much better explained than most I've seen.

@amirmoezi8316 3 года назад

Thanks a million for your invaluable content.. it's just wonderful

@nileshparmar21 8 лет назад

Excellent. Keep up the good educational work.

@jordanthomas3346 11 месяцев назад

10 years later and I'm still happy to hear his voice.

@myle6749 Год назад

Sorry for sounding ignorant...who determines the bond price change from $950 to $980? Is this the same bond changing price, or is $980 a completely new bond being put up for sale?

@ttfan3257 3 года назад

explains how increase demand for an old bond cause a rise in that bond's price,with correspoding fall in it's yield Not too dissimilar with analysis of stock dividend yield calc

@flypimpinogflypimp2126 2 года назад

Finally explained where I can understand

@fatai-ayoadeyusupha.2105 2 года назад

Explanatory. I got it towards the end. Great

@enayathali8971 6 месяцев назад

nice, really simple

@alansimon1354 11 месяцев назад

Beautifully explained. Thanks 👍

@sarahvlogs5337 Год назад

thank you so much!

@xabiergaray4264 4 года назад

Thank you for making these videos. Excellent presentation. 👍👍👍👍👍

@xabiergaray4264 4 года назад

I recently spoke to a "Banco Basa" president here in Paraguay in front of many people and when I was exposing how the central bank is independent from the government and how the government is indebted to the central bank; I asserted that because the government borrows money from the central bank instead of creating its own money, interest and debt free for its people to use, that that was the cause of the financial troubles in every country. The banker retorted with, "we don't lend money to the government we buy treasury bonds." And in the argument that we were having (he knew full well he was spinning the debate) I couldn't get the public to understand that that bond purchase was actually a clandestine loan. I felt defeated. But seeing your video has picked up my spirits. Thank you, I really needed it.

@manniedelarosa1099 4 дня назад

thank you!

@michaelscalise1925 Год назад

Thanks for the video

@noahschmartz2354 11 месяцев назад

Khan nails it as usual.

@zhayat 9 лет назад

Great explanation on #bonds! #money

@Mark1Mach2 3 года назад

Crisp and clear explanation 👌

@nkrulez 2 года назад

concise and informative video. well done

@Aditya1057 2 года назад

A very good explanation, thank you very much

@alexislye6743 7 лет назад

thnk you!

@tifius 11 лет назад

Not necessarily unsustainable. What's unsustainable is having a large debt to GDP ratio. If an economy has growth then borrowing matching that growth isn't really a problem as long as debt to GDP-ratios stay in control.

@user-tm3gf3tz5v Год назад

Good explanation

@elenakylae.katipunan9926 Год назад

Thank u SO MUCH for this

@GetMoneyCorporateA 9 лет назад

Awesome explanation

@grownupgaming 2 года назад

Great vid, but what is the price when the govt issues the bond initially?

@jasonv.kennedy6796 9 лет назад

Great explaination

@joses.a.2 6 лет назад

Great explanation. Could you apply this to yesterday's event of Treasury bonds massive selling? Seems weird to see that markets fall if bond yields increases.

@epcortek11 6 лет назад

This guy is so good!

@JackMcMotivate 4 года назад

This is for 0 coupon. How bout those with bi annual yield?

@seisopheapanya7528 2 года назад

thanks a lot, sir. as always

@pawar_me 3 года назад

I finally understood ❤️

@antonioaguilar3257 6 лет назад

superb explanation!!! thank you!

@civcinfo 3 года назад

The best!

@racer1d 4 года назад

Thank you.

@polesetti 5 лет назад

Perfect! Thanks

@gonebamboo4116 4 года назад

Great, now do an example with negative interest rates.

@dorachdew 3 года назад

Amazing video

@virulentme1418 3 года назад

What does Khan not know about? Please tell me!!

@frodrigues2008 7 лет назад

Hi...i would like to know the "perfect range" that a gov bond say 10Y yield should have for example the US economy?

@absolutebosscollective8202 3 года назад

Awesome!

@mnayak9348 Год назад

What is coupon rate and yield

@jessiemayfield6749 4 месяца назад

My only problem with these videos is that they’re too simple, I’m being asked to calculate risk premiums and range of possible profits and losses on this topic, while he’s giving the introduction

@TopCyclone-rf7iy 11 месяцев назад

what about inflation?

@LastEmpireOfMusic 3 года назад

nice calculator

@mr.q8023 Год назад

If demand goes down? Forced down. What then? Japan & China selling

@Blc-xg5pm 3 года назад

So the higher the interest the better right?

@jensenbaits5079 3 года назад

Correct. You earn less interest, which isn't beneficial when the price of the Treasury increases. The price of the treasury bonds increases, as a result of their greater demand.

@emmanuelochoa2656 6 лет назад

What if the government loses money during the time of the loan you've made them. Would they still pay you?

@TriPham-yo7we 3 месяца назад

Treasury only sell minimum $10,000 each and double each 10 year

@johnhess4148 10 месяцев назад

dammit dammit dammit I could've saved weeks if I'd found this channel first.

@Daalia00 8 лет назад

like your voice,

@user-bj1cb5kv8l 5 дней назад

Rodriguez Paul Robinson Joseph Martinez Matthew

@jextreme22 10 лет назад

Correct me if I'm wrong but I thought treasury bills mature at 1 year or less, treasury notes mature between 1 - 10 years and treasury bonds mature at over 10 years... Why is the title treasury bond and then he talks about a 1 year maturity. I'm confused :(

@ThePartTimeEconomist 5 лет назад

You are correct on the terms. Other than the difference in names, all of what he is saying still applies to notes, bills, or bonds. Although it was a slip up, the information can still apply.

@Ashley-df5ni 2 года назад

why did you divide 1000 by 950?

@alexj7700 6 лет назад

wait until these bond yields go to historically normal levels , the govt will have to default on its obligations and there will be to be a restructuring.

@tsb7911 2 года назад

If a 10 year bond cost $125, do I get $100 back in 10 years or $125? I've never seen that question answered anywhere.

@danielluster732 5 лет назад

That's interesting. B-)

@fernandocordero1938 3 года назад

What I don't understand is where is the 5.3% coming from? If I divide the $50.00 (the profit) over $1,000 I get 5.00% not 5.13%? Same for the price of the treasury note at 980, the actual profit is $20.00 / $1,000 = 2.00%

@eriksonderlon 3 года назад

It should be profit divided by the price paid. The profit is derived from the fact that you will be paid more for the bond at maturity than you paid for it when you bought it.

@alfredkwaak 6 лет назад

why is 5% 5.3%

@hus390 5 лет назад

He actually complicated things in the example at 2:30. Its 5.26%. He rounded it up. Just divide the gain of $50 by the face value of ($950) and you will get (0.0526). The yeild is often in percentage. To get it, multiply it by (100) and you will get (%52.6).

@abetts123 Год назад

Just do 50/950. Much easier to understand

@reidnorris8320 6 лет назад

we just %100 debt/gdp today. i know that swiss is at %127/gdp. the swiss have the gold and the US has the military

@lonnieatterbury1277 6 лет назад

this video was informative but seems to be over complicating things. please someone correct me if im wrong. Forget all the percent and yield information. i give the government 950 and the promise to give me 1000. 50 dollar in profit. what benift do i have of doing this? why would anyone do this am i missing something. please explain thank you because i can make more of a return with a 12 month Cd at a bank.

@whiskey4609 6 лет назад

A thousand dollars isn't worth it lol, try 10 mil. For larger amounts of money it makes a little more sense. But typically people would diversify their investments more.

@herodotus53 5 лет назад

Also, Treasuries are much more liquid than a CD- if you wanted to, you could sell them before the maturity date to purchase a higher yielding security, but as I’m sure you know, a CD locks you in for a specific length of time and you would have to pay a penalty for early withdrawal of funds from the certificate. So while the relatively small dollar amount of annual yield in the example might not be that impressive, there *is* certainly an advantage to holding investments that can be easily converted to your local currency.

@danielbrian8019 2 года назад

You could've save me some time buy just adding 10.cwnt to a dollar

@mynamejeb8743 3 года назад

5.3% interest? good like reaching that now lol

@shezyam460 3 года назад

lol the entire sections of the economy may collapse at those rates

@davidalen9279 6 лет назад

excellent

@gunblade7610 Год назад

It would be interesting how bonds would look if Government wasn't also taking so much Taxes... Oh Hai IRS agent reading my posts 😁

@toxichammertoe8696 11 месяцев назад

Now i see why banks do this.

@randym5515 6 лет назад

Why is it 5.3% and not 5%?

@mingchineselanguageinstruc8431 6 лет назад

50/950, not 50/1000.

@valleycarpentry5269 2 года назад

My math could be off here but 1000 dollars return after a year after paying 950 dollars is more than a ten percent return....? No.?

@valleycarpentry5269 2 года назад

No sorry.... I thought this was the yield.... I thought it was 100 dollars payment ie the yield or coupon.... I'm thinking of the traditional yearly yield payment....

@Greg-rz2sk 3 года назад

I’m gonna start putting khan academy on my resumes

@annoyingcommentator1582 4 года назад

5% on a treasury bond?

@iman782 Год назад

Amc stock holders are about to be filthy rich

@katrynamcintyre5687 6 лет назад

January 19, 2018: "The threshing floors will be full of grain, and the vats will overflow with the new wine and oil. Then I will make up to you for the years that the swarming locust has eaten, the creeping locust, the stripping locust and the gnawing locust, my great army which I sent among you. You will have plenty to eat and be satisfied and praise the name of the LORD your God, who has dealt wondrously with you; then my people will never be put to shame." Joel 2:25 KATE

@jatinkhare7740 4 года назад

Came here to understand how your govt. is arranging all the stimulus money? yeah, me too.

@Franchisetyg 7 лет назад

That's a 5.3 percent return

@alfredkwaak 6 лет назад

50 out of 1000= 5%

@Philip_Florez Год назад

I’m here because of tmf lol

@parzival2.033 3 года назад

🤔Were you teaching chemistry or statistics? Because you sounded like more of a stat teacher I know that you used an illustration 😝😂

@DaddysFastestSwimmer 5 лет назад

Ok, now what in gods name is a generic bond?

@laurenhilbert7805 5 лет назад

This stuff always brings up more questions..... Economy and government should be covered earlier and for a greater length of time in school.... the powers that be don't want us all knowing; we easier distracted and controlled! It's time to wake up people! 😄

@ForgottenKnight1 6 лет назад

Lending 950 dollars to get 1000 dollars over the course of 1 year, is a 5% yearly performance, meaning about 0,42 monthly performance. I think that if people want to get into this kind of stuff, they should learn some trading basics, be it FOREX, stocks, futures, whatever. 5% yearly performance is easily achievable even for a beginner.

@32kirby32 5 лет назад

ForgottenKnight1 it’s for people with huge Amounts money wanting to have lower risk than stocks and other, and don’t want to keep it in the bank. Not really for a normal investor