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124 - Investment Planning government to support a speci c need Investors are exposed to credit risk, but the risk is very unlikely because the government provides a moral backing D Treasury in ation protected securities (TIPS) (1) TIPS are securities issued by the federal government that have coupon payments that periodically adjust to changes in the in ation rate (2) Changes in in ation are represented in the principal and not the coupon (3) The in ation-adjusted principal is multiplied by the real rate to get the appropriate coupon payment The real rate represents the xed coupon rate net of in ation For example, suppose a par value of $10,000 and a coupon rate of 4 percent Annualized in ation for the next six months is 5 percent The coupon payment is calculated as follows: (a) First, compute the in ation-adjusted principal If the annual in ation rate is 5 percent, then the semiannual rate is 25 percent (5% 1 2) Apply this to the principal of $10,000 to get an in ation-adjusted principal of $10,250 ($10,000 1025) (b) Next, compute the semiannual coupon payment This is found by multiplying the in ation-adjusted principal amount with the semiannual real rate The semiannual coupon rate equals $205 ($10,250 2%) E Treasury STRIPS (1) In 1985, the Treasury introduced zero coupon bonds called STRIPS, standing for separate trading of registered interest and principal securities (2) STRIPS are direct obligations of the federal government (3) STRIPS do not pay a coupon, but interest is taxed as it accrues Therefore, it is appealing to purchase STRIPS in retirement accounts because tax in retirement accounts is deferred until funds are withdrawn (4) STRIPS are more volatile than other government bonds during periods of changing interest rates (5) To take advantage of the greater price volatility found in STRIPS, it is better to buy them when interest rates are expected to fall 3 Municipal bonds general obligation bonds and revenue bonds (1) General obligation bonds are backed by the full faith and credit of the taxing power of the issuing government (2) Revenue bonds are supported by the revenue of a project (3) General obligation bonds have less risk than revenue bonds because they are supported by taxes, whereas revenue bonds are supported only by the funds generated by a project (4) Municipal bonds tend to lack marketability and liquidity These issues are traded over the counter and the market is thin, causing a large spread between bid and ask They trade in denominations of $5,000 face value (5) Most debt issued by state and local governments is a long-term serial issue Serial bonds offer the bene t to the buyer of knowing when the bonds are going to mature The bonds are purchased based on the investor s time horizon (6) The federal government does not tax interest earned from municipal bonds Municipal bond interest may also be tax exempt for various states For example, Colorado does not tax Colorado municipal bond interest, but taxes municipal interest from other states.



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Update the "foreign key table" (LOCATION, in this case) to have a single-attribute primary key Replace the composite information in the "host table" (DEPARTMENT, in this case) with the proper foreign key values

Result:

.

Thus, we first change LOCATION as follows:

where s is the solubility in water in mol/L, t b is the boiling point now in "C. It is also possible to determine enrichment factors from chromatographic data (Schantz and Martire, 1987). For gaseous samples in the temperature region from 0 to 40 "C the partition coefficient normally increases by a factor 2 - 4 if the temperature decreases about 20 "C. Generally, aqueous samples show much weaker dependence on temperature and the sign is often not predictable.





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Again, the amount of data we need to store is less (this time saving three cells), and it obviously improves as the tables get bigger We've also made the data easier to manage If a department changes to a different building and floor, we need to update only one row instead of many As we saw in the preceding examples, data normalization not only is space efficient (leading to better scalability of server-side resources such as disk), but it helps ensure the correctness and consistency of our data

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The living condition in Canada is first class. The air is fresh. Only it s difficult to make a living I had no choice but to come back to make a living. At first I was quite happy when I emigrated, because my kids were young, they needed me to take care of them. After they had grown up, they no longer needed me, I felt bored. Furthermore there had only been expenses and no income for so many years. So I considered coming back to make some money. I wish to go back after retirement, but it is contradictory. When I expire, I prefer to be buried in Hong Kong. But I still wish to live there after retirement, because I like the lifestyle there. But I prefer dying in Hong Kong, not there.

Topic 40: Types and Use of Investment Vehicles - 125 4 Corporate bonds A Investment grade (1) Investment grade bond does not indicate a particular type of bond; the term refers to any debt of high quality rated triple B or higher (2) There are several types of corporate bonds that can be investment grade (but these can also be high-yield grade, discussed under Topic 40, Section 4B) (a) Secured versus unsecured bonds i Secured bonds have a claim to assets of a corporation in the event of default, insolvency, or liquidation For example, a mortgage bond is secured by real property or buildings ii Unsecured bonds are not backed by collateral (b) Debentures i Debentures are promissory notes that are not backed by collateral (they are unsecured), but are supported by the creditworthiness of a rm or government agency ii During bankruptcy, debentures are redeemed only after all secured debt has been paid off Therefore, debentures pay a higher yield than secured debt because of the added risk iii Some debentures are subordinated, and these are even more risky than other debt Subordinated debentures are paid off after all other unsecured debt is paid off during bankruptcy Investors are often attracted to subordinated debt because of higher yields and other embedded options, such as convertible provisions (c) Zero coupon bonds i Bonds sold with no coupon at a discount and redeemed for face value at maturity Interest is accrued over the life of the bond ii There is no tax avoidance in buying zero coupon bonds iii The tax disadvantage of accrued interest can be circumvented in retirement accounts because tax is deferred until funds are withdrawn iv Zero coupon bonds are extremely volatile in periods of changing interest rates v Zero coupon bonds should be bought when interest rates are expected to fall, to take advantage of the increased bond price B High yield (1) High-yield securities are often referred to as junk bonds These are bonds that are low quality, speculative grade, usually rated below triple B The features are the same as investment grade debt However, the poor quality means they offer higher yields than investment grade debt Triple B or better is generally considered investment grade (2) High-yield securities often have a call feature and sinking fund They are usually debentures and may be subordinated to a rm s other debt However, some high-yield securities have collateral (ie, mortgage bonds) (3) These bonds are often issued to nance a takeover and merger or to help a start-up rm raise capital C Convertible (1) Conversion rights allow a bondholder to convert the bond into shares of common stock The conversion feature acts as a bene t to induce investors to buy the bonds It allows a.

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