Why bonds 32nds

The treatment of yield for these issues differs from the non-callable issues. Treasury Bills Quoted on Discount Basis Bills, which mature in a year or less, are quoted differently from notes and bonds, since bills do not pay an established rate of interest.

An investor's return on a bill is the difference between the purchase and subsequent sale price or, when held to maturity, the face value paid by the Treasury. Consequently, bills are quoted at a discount from face value, with the discount expressed as an annual rate based on a day year.

As with notes and bonds, a numerical shorthand is used to present the information on bills quotes. For this example, assume the current date is days before maturity. The bid, 5. The ask quotation, 5. The seller always seeks a sale with a lower return thus a higher price than the buyer wishes to pay. Therefore, unlike the quotes on notes and bonds, bid quotes on bills are always higher than the asked. The "change" of -. Bond quotes are seen either as a percentage of the bond's face value or as a dollar value.

Municipal bonds may be quoted on a dollar basis or on a yield-to-maturity basis. There are three different ways that you will see bond prices quoted:. What is a Bond Quote?

The bond for Denver's airport pays less interest, but its price is also lower so its overall yield to maturity is higher. The Arizona bond costs near par, so its yield to maturity is slightly lower than the other one despite its higher interest coupon rate. Price -- How much it would cost to buy the bond currently, on the open market. Yield to maturity -- The rate of return you can expect to get from your bond if you hold it until the maturity date. For bonds callable prior to maturity, yield is computed to the earliest call date for issues quoted above par and to the maturity date for issues quoted below par.

The percentage immediately following the company name is the interest paid by the bond as a percentage of par value. I think you're basically right about being a holdover from Europe, especially Spain :.

These early stockbrokers [who were trying to create the NYSE] looked to Europe for a model to build their system on and decided to base it on the system of Spain. This was largely due to the fact that the U. The real was the Spanish silver dollar and was divided into eight parts. This evolved from the method of counting on the hands, similar to the decimal system.

The difference was that the decimal system used the thumbs as part of the number while this other system used the thumbs to denote the total of the four fingers. Therefore, a person would count to four on one hand and then use the thumb to indicate a total while they counted on the other hand. Two thumbs equaled eight. The real could be broken into two, four or eight parts, giving birth to the term pieces of eight.

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