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In notes, it is written that if gilts interest rate is decreased so the owner will still receive interest as per coupon rate on Gilt. If the owner sell so the new owner will also receive interest as per coupon rate.
So when the interest amount would be constant only market value and interest rate would change? And when the market value changes like here the interest rate is decrease so Market value would have been increase so we will sell at new market value or at the face value of the gilt?I am a bit confused by the above question. Are you asking about the difference between selling a bond cum interest or ex-interest?
The coupon rate is printed on the bond and does not change. If you have 100 nominal value 4% bonds you will receive 4 every year.
If the market value of 100 nominal 4% is 200, then to buy 100 nominal will cost 200 on which you receive 4 interest. This is an actual return of 4/200 = 2%.
Market values will rise/fall so that investors receive an actual return in line with prevailing interest rates.
And sir, I am saying that if I sell a gilt so will I receive money which would be market value or the face value of Gilt?
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