Every time I think I understand bonds, I realize I really don't. So I recently purchased 35,000 shares on Vanguard of a 2 year Treasury Note from the government auction, CUSIP 91282CLH2. At the time of listing I think the target rate was 4%, today I think it got published/finalized at 3.75% I'm guessing because demand > supply during the auction hence the price was lower, so I wasn't surprised.
My understanding, however, was I would put in an order for a face value of $35k, but the actual purchase price would be the discounted price of 2 years worth at 3.75%. Yet it looks like the actual purchase price withdrawn from my settlement fund was $34,928. My understanding was the $35k should be the total money I get at the end of two years, and the purchase price would ~$2k less than the face value?
My understanding, however, was I would put in an order for a face value of $35k, but the actual purchase price would be the discounted price of 2 years worth at 3.75%. Yet it looks like the actual purchase price withdrawn from my settlement fund was $34,928. My understanding was the $35k should be the total money I get at the end of two years, and the purchase price would ~$2k less than the face value?
Statistics: Posted by papermario — Thu Aug 29, 2024 12:12 pm — Replies 3 — Views 209