A correspondent asks for an explanation as to what induce-
ment there is for holders of 5 per cent. Treasury Bonds of 1988-35, to avail themselves of the opportunity for exchanging them for 4 per cent. Consols at £114 10s. That option, it Will be remembered, has to be exercised between now and the end of the month, and this correspondent points out -that if she makes an exchange she would lose interest, say, of a little over £3 10s. on each £1,000 of the expiring Bonds converted. _The " inducement," of course, is entirely con- nected with the view which may be taken of the future of the investment markets. Four years hence the Government has the right to repay. the Bonds at par, and there are many who ,believe that British Government Securities may -then stand at a level when the reinvestment of the funds would give a lower yield than can be obtained under these con- • version terms. It is, of course, a matter of opinion, but that this view as to the probable course of British Government Stocks is fairly general may be gathered from the fact that at the present time the 4 per cent. Consols stand at a price giving a yield of about 2,41. 1 ls. per cent.
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