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Foreigners(non residents) don't have to pay tax on Government bonds.
Sep 04 11:07 am
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All Comments by hatarakiman »Ten Year Treasury Note: A Terrible Investment [View article]
People do buy bonds and use it as collaterals. The Margin Maintenance Req of 5~10 year bonds is only 4% market value. You can earn 3.38% plus other derivative's gain.
Assuming you always buy 10 year notes at auction and hold it to maturity, spreading it out, it's like 10% each year for the 10 year notes. It's ok to put 10% in 2008 and another 10% in 2009...
But anyway, I prefer TIPS, it's inflation safe. But if you buy it from the secondary market, it's better to choose the market price that is less than the 100 principal value.