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REDDIT
Can someone please explain how a treasury bond payout works to me like I’m 5?
Let’s say I invest in a 10 year bond. Let’s say it’s a $1M bond at 5%.
A) How much does it cost to buy?
B) How much do I get paid out every year?
C) How is it different than a 2 month, $1M treasury bill?
D) Let’s say yields stay the same and I want to sell the bond in year 7, how much will it be worth?
E) Let’s say I still want to sell in year 7, but yield have gone up to 6%, is the bond now worth less?
Thank you to any one who has the patience to enlighten me!