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Topic 40: Types and Use of Investment Vehicles - 123 (1) Treasury notes have maturities in 2 to 10 years in denominations of $1,000 to more than $100,000 (2) Treasury bonds are the government s long-term debt and have maturities greater than 10 years (3) Notes and bonds are issued as coupon securities (4) Treasury notes and bonds are the safest intermediate- and long-term investments available for purchase because they are backed by the government This increased safety results in yields that are lower than those of high-quality corporate debt (5) Interest is subject to federal income tax but exempt from state and local tax B US government savings bonds (1) The Series E bond was designed to encourage more people to save money It was sold in denominations of $25, $100, $500, and up to $10,000 Series E bonds were sold at a discount and paid no interest, similar to zero coupon bonds (2) Treasury issued the new Series EE bond to replace the Series E bond The rate of interest is a variable rate that allows investors to bene t from increasing interest rates (3) Interest earned for both E and EE bonds is not taxable until the bonds are redeemed or reach maturity However, they do permit recognition of the income in earlier years with a valid election Recognizing the income from E and EE bonds may be a tax planning strategy for young children who have no other taxable income and will thereby create basis in the bonds (4) Interest deferred on Series EE bonds can be further deferred by exchanging the EE bonds for HH bonds The deferral continues until HH bonds are sold or mature (5) Interest from Series EE US government savings bonds may be completely excluded from gross income if the bond proceeds are used to pay quali ed higher education expenses (6) H and HH bonds are sold at par in larger denominations (minimum of $500) The bonds have a maturity of 20 years, and interest is paid and is fully taxable in the year of payment There is not an option to accumulate the interest or defer the taxes Series HH bonds are a new issue that is designed to replace the older series H bonds (7) It should be noted that the interest earned form E, EE, H, and HH bonds is US government interest and is not taxable by municipalities C Federal agency debt (1) Bonds issued by federal agencies are not debt of the federal government Therefore, their yields are higher than those yields available on US Treasury debt However, they are extremely safe because they have the backing of the federal government (a) This backing in most cases is only moral backing, which, in the case of default, the federal government is not obligated to support the debt (b) Other agency debt has a legal backing In this case, the Treasury is legally bound to assume any obligation contained in the debt s indenture (2) Federally related institutions include the Government National Mortgage Association (Ginnie Mae) that is backed by the full faith and credit of the US government These bonds have no credit risk because there is no chance of default (3) The other type of agency debt, government-sponsored entities, includes the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Bank Corporation (Freddie Mac), and the Student Loan Marketing Association (Sallie Mae) These are privately owned, publicly chartered institutions that were created by the US.

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In addition to simplifying our design, we've reduced our storage needs The old PROJECT table required

7. Notice that the new account you created in the previous step is added to the pro le, as shown in Figure 43-19. Clicking Add sets up multiple accounts for the Database Mail pro le to allow for Failover and avoid single points of failure. FIGURE 43-19 Add an account to the Database Mail pro le.

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Again, although this seems like a small reduction, these numbers add up For example, if 1,000 projects were evenly split in terms of priority (half urgent, half high), our original scheme would require 3,000 cells and our new scheme would require only 2,004 a savings of more than 33 percent Converting to 2NF, then, is not only "more correct" because much of the redundancy of independent information has been eliminated, it also yields more efficient databases Third Normal Form A table is in third normal form (3NF) if it's in 2NF and all of its nonkey columns are independent This is a situation where a so-called transitive dependency can exist in the sense that the column values of one table are duplicated in another table (instead of the other table simply containing a key to the first table) For example, suppose we have a table called LOCATION that contains a composite primary key (BUILDING, FLOOR)

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Looking back at the DEPARTMENT table, we see that this information is needlessly duplicated Building and floor are always mentioned together in DEPARTMENT, even though neither FLOOR nor BUILDING is functionally dependent on the primary key of DEPARTMENT We can make our design more efficient by converting the DEPARTMENT table to 3NF To do so, we need to

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