re: Predictions on Bond Market Crash

quote:

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So regarding municipal bonds, if you buy at say $100 yielding 4%, and the value of that bond goes to $95. Are you getting paid 4% interest on the original $100 you bought it for or are you now only getting 4% on the current value of $95 resulting in a lower yield until the value goes back up?

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You get 4% on the $100. However, it will actually give you a higher yield.

Yield=coupon rate/price.