imasavernow
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Hi
I'm a newbie and can't find a guide to index linked gilts anywhere on the net. I am trying to understand the yields.
For instance, at present the Gross Redemption Yield on UK 2.5 % 2013 is around 3.06%. My understanding is that the assumed rate of UK inflation is 3%.
So does this mean that the real yield is only 0.06% ? Or is the total yield 3 + 3.06= 6.06% ( I think not). Or is the 0.06% the yield on the capital and the interest is extra?
thanks
I'm a newbie and can't find a guide to index linked gilts anywhere on the net. I am trying to understand the yields.
For instance, at present the Gross Redemption Yield on UK 2.5 % 2013 is around 3.06%. My understanding is that the assumed rate of UK inflation is 3%.
So does this mean that the real yield is only 0.06% ? Or is the total yield 3 + 3.06= 6.06% ( I think not). Or is the 0.06% the yield on the capital and the interest is extra?
thanks
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