FIN 502 Chapter Notes - Chapter 15: Common Stock, Stock Exchange, Call Option
Document Summary
No default risk if you want to cash before maturity date you may suffer a capital loss or enjoy a capital gain. Very liquid; you can normally sell them though the same investment dealer you bought it from. Face value- amount federal government will pay on maturity date. Do not pay interest they are bought at a discount from their face value. Discount- pay a lower price than the face value. Rate of return on t-bills is usually higher than the rate of inflation. Actually free of default risk only: canada saving bonds- sold once a year with the actual issue date and maturity date falling on november 1. Offer a fixed rate of interest compounded annually and the interest rates are normally adjusted for later years. Regular interest bond- pays annual interest either by cheque or by direct deposit on nov 1 each year: available in denominations of , 500, 1000, 5000, 10000.
