I know that they are becoming popular now that interest rates are dropping....

How do they work with bonds and do they depend on the types?

Basically, a bond swap is an exchange of two or more bonds issues. Effectively, you are changing one cash flow for another. A simple type of swap (or hopefully, portfolio improvement) involves the sale of an overvalued issue for one that is fairly or even undervalued. In a broad sense, when yield spreads between quality grades are narrow, portfolio managers would look to upgrade since the higher quality issues are relatively more attractive than the lower quality ones. When spreads are wide then look to downgrade. Note that not all bond swaps are portfolio improvements. Sometimes they may only benefit the bond salesman and his firm.

Other types of swaps may involve going from long bonds to shorter issues and vice versa, quality improvements, anticipation of downgrades or upgrades, etc.

In the municipal market one often hears of tax swapping towards year end. This involves the sale of a bond in which you have a loss and the purchase of another with similar or better characteristics. They can not be identical issues.

More complex are interest rate swaps used by corporations and sophisticated investors. These allow investors, issuers etc to exchange two different sets of future cash flows. Swaps are often used by borrowers when they exchange a fixed rate liability for a floating rate liability and vice versa.

More detailed information can be found in Frank Fabozzi, editor, The Handbook of Fixed Income Securities, 4th edition, Irwin. The Columbia Business School library should have a copy.

I have a friend diagnosed with lupus. He only had 18,000 from retirement fund to live on plus $800 monthly from disability. Any suggestions on investing the $18k to generate monthly income?

I am sorry but I am unable to offer specific advice on individual securities.

You should seek out a broker from a reputable firm to assist your friend. There is much more to know than that he has $18,000 and needs monthly income. The broker will be in a position to help.  But he will have to ask alot of questions since it is important for him to "know his customer" in order to prepare the right suggestions.

Remember one thing, the higher the income or yield, the greater the risk whether it is credit risk, interest rate risk, call risk etc.

Sir, I wish to rollover $1m into some type of investment that will guarantee my principle and give me return like that of the stock market, my time horizon is five years, why is this so impossible?

Your question is good and something people have been striving for since the beginning of time, namely good returns and no risk to principal. Unfortunately, there is no such thing as a free lunch and I don't know of any way of investing your $1 million for five years with a guaranteed return of principal and a return of the stock market.

Taxes are not considered in the answer to your query. You can invest the money and get a guaranteed return of principal if you invest in zero coupon Treasury bonds known as STRIPS. A five-year STRIP due in February 2001 sells for about 76 3/8 or $763.75 per $1,000 principal amount. This is an approximate yield to maturity of 5.38% certainly not a return to tickle you heart and not competitive with average equity returns over the long term. I believe that the Ibbotson figures for equity total returns since the 1920s (?) is in the 9 to 10% compounded rate of return. This includes periods of losses and much lower returns and periods of higher returns. Obviously, other stock indices have given other returns as shown below.

To get a return greater than the STRIP requires taking some additional risk. With the Treasury STRIP we do not have credit risk or reinvestment risk to worry about.A five year Treasury coupon issue will provide you with guaranteed principal but there will be some reinvestment risk since you do not know the yields you will have for coupon reinvestment. If you went to all equities you would be expecting something higher than STRIPS but you then will have higher risks. Who is to say that anyone will make the right stock selection. Professional stock pickers often have a tough time. Time is on the side of a patient investor but five years may not be enough. Will the next five years have returns like that of the recent past as shown below? Who knows.

Annual Total Returns (%), 1990 to 1995

It seems to me that your tolerance for risk is not too high and that you need that million in five years. Under those circumstances it is my opinion that you will have to look at the no risk 5-year STRIP. Sorry that I couldn't come up with a magic solution for you.

Can you give me preliminary information on what constitute Performance Bonds backed by Sally Mae's? Are they Government Bonds based on government guaranteed mortgages, and if not, what kind of financial instrument are they? In what denominations do they come, and what is their usual life?

I checked my Sallie Mae file for info on Performance Bonds. I also checked my firm's files and I called my database analyst and we couldn't come up with an answer. I called SLMA and couldn't get a person. My analyst called and talked with his contact. He never heard of the item in question.

My guess is that these are not securities but performance bonds as used in public construction projects. Black's Law Dictionary says a performance bond or a completion bond is given to insure that a contract once awarded will be completed as awarded within a period of time. Also, a bond which guarantees that a contractor will perform the contract and guarantees against the breech of the contract.

Performance bonds can be purchased through insurance companies. Maybe, SLMA will also take for the projects it may be involved in, a bond (not a security) that may be backed up by collateral consisting of its securities.

Sorry that I can not be of any more help.

I am looking for a definition of duration and information on how to calculate duration.  Is duration only applicable to variable rate securities?

A simple definition of duration is the weighted average of the present value of the cash flows from a bond taking into account the amounts of the payments as well as the timing of those payments. The resulting figure is a measure of the volatility risk associated with the bond. The number shows how much a bond's price changes for a given percentage change in interest rates. If a bond's duration is 4.5 years, the price of a bond will fall 4.5% for a 1% rise in rates.

The assumption that the cash flow will not change when the yield curve shifts in a parallel fashion makes sense for option-free bonds such as non-callable Treasury issues. The same can not be said for corporates with call features and sinking funds. Yield changes can alter cash flows.

With variable rate securities, measuring duration will be more difficult than with fixed rate issues for the simple reason that one does not know the cash flows ahead of time.

The book, CORPORATE BONDS: STRUCTURES AND ANALYSIS by Wilson and Fabozzi )1996) says:

"Modified duration is a measure in which it is assumed that yield changes do not change the expected cash flow." It says that "Effective duration....in which recognition is given to the fact that yield changes may change the effective cash flow."

For more duration info you may be able to get the above book at your library or bookstroe. You may also look in THE HANDBOOK OF FIXED INCOME SECURITIES by Frank J. Fabozzi.

As a kid, the only duration I knew was when people went off to the armed forces for the duration plus six months.

Do you think that the yield curve will steepen (2s-30s). 98 bps is awful flat given that the FED is likely to keep policy on hold until Spring.

I am not a student of the yield curve but my thoughts are below.

Yes, the yield curve seems relatively flat but I can't tell you when it is going to get much steeper though I expect that it will. Right now the long bond doesn't have a lot of appeal to me in that I don't think that one is getting paid enough to extend.

However, the basis point spread has widened somewhat in the past month. Today the yield spread between the 2-year Treasury and the long guy is 105 bp (4.99% to 6.04%). At the start of the month the spread was 80 bp (5.15% to 5.95%). A year and a month ago, January 2, 1995, there was a FLAT curve in the 2/30 year with the 2 year T at 7.69% and the 30 year T at 7.88.

There was an article recently in Forbes that showed 10-year bond yields versus credit rating. It seemed to me that to go from AAA bonds all the way to BBB bonds did not give that much extra return. Only when you went from AAA bonds to real junk did you get a big difference in yield.  I am a conservation investor but I don't feel I am getting paid to buy anything other than AAA bonds. When do you think additional risk is worth it? Should I just take a deep breath and buy real junk bonds? Or should I just forget buying bonds all together?

Thanks for your inquiry of the other day. Yes, there is a big difference in yield between AAA corporate bonds and CCC corporate bonds. There is also a big difference in risk. A bond rated 'AAA' is of the highest credit quality and has an exceptionally strong ability to pay interest and repay principal in accordance with the terms of the bond agreement. This ability is unlikely to be affected by reasonably foreseeable events.

On the other hand, a "CCC" rated bond (the upper rung of the category which is predominantly speculative and with substantial risk) is defined by Standard & Poor's Corporation as having

"... a currently identifiable vulnerability to default, and is dependent upon favorable business, financial and economic conditions to meet timely payment ...." Further, " In the event of adverse business, financial or economic concditions, it is not likely to have the capacity to pay interest and repay principal."

Since you say you are a conservative investor, you can see that bonds falling into the highly speculative category (CCC) are not for you. While you may get a high yield or current return (interest rate divided by price), you may get a low total return. Total return takes into account the interest received, any change in price (up or DOWN), and income from the reinvestment of the interest earned. The risk of default is much higher in the lower rating categories and so the risk of a loss (negative dollar return) is higher. Ratings are an overall good indicator of default risk.

Going further into you query, I'd be very careful about taking a deep breath and "buy real junk bonds." It could prove to be too much of a shock for the conservative investor's system. I believe that conservative investors ought to limit their bond investing to mostly 'AAA' and "AA' bonds with perhaps, some touch of high-end single-'A" paper. For those who may be less risk averse, venturing carefully into the lower medium-grade category of 'BBB' is acceptable. Even some well-selected upper-end 'BB' issues may be okay for some investors.

I believe in modest diversification of a corporate bond portfolio but the lower down in quality an investor goes, the more diversification is required. Most individual investors neither have the time nor the resources to properly manage a diversified portfolio of speculative grade debt. Fundamental corporate credit and bond information is much harder to obtain than for publicly traded equity. Information flows easier to the larger institutional players with large transactions to place. Also, price information is tougher to come by with the spread between the bid and the offer prices often wider than for high grade bonds. Prices of most speculative bonds are not frequently published. The Wall Street Journal, Barron's and perhaps a couple others publish small lists of prices or valuations for some of the more actively-traded issues. Of course, prices and quotes for bonds listed on the New York Stock Exchange are quite readily available. Therefore, in my opinion, the logical place for most investors wanting to be in the speculative grade bond market is in the high-yield bond mutual funds. Again, one may want to invest in three different one so that you have some diversification among portfolio managers.

You ask when is the additional risk worth it? The additional risk may be worth it when the additional expected reward is high. This may occur AFTER a company goes belly-up and enters bankruptcy. It may be worth it when everyone is shying award from the additional risk of the speculative grade market as back around 1990 when many issues were practically being given away. BUT it is only worth it to well-informed, unemotional investors.

I can't tell you to "forget about buying bonds altogether" since I do not know anything about your needs, goals and objectives. You could be a conservative 25 year old with great prospects who doesn't need senior securities. On the other hand, you could be a 99 year old who probably shouln't even buy green bananas!.

Sit back and do a self analysis about your investment goals and objectives. Factor in your emotional and risk taking profile. Review what you have done with your investments to date. Why did you buy and why did you sell. Have you relied on sound advice or did you pick up your information at the lodge? Take time doing the review and reflect on what you have learned.

I trust this is helpful and will lead you on the path towards reaching your goals, what ever they may be.

I'm looking for a safe place to put $5,000 offering a high yield at this time (7% or higher) any suggestions?

I'm looking for a safe place to put $5,000 offering a high yield at this time (7% or higher) any suggestions?

To give specific investment advice, one needs to know more about a persons investment needs and risk tolerance. We recommend that you talk to a couple of reputable brokers or financial planners if you do not already have one. (21st Century Municipals, Inc. is not a broker/dealer or registered investment advisor and is therefore unable to give individual investment advice.)

You may also review upcoming bond issues and current bond offerings from broker/dealers in the Bonds & Brokers section on Bonds Online. We also expect to have more bonds available for you to research in the near future.

I'm 64 and recently put 20% of my portfolio in these bonds. These are the only bonds I have. The rest is in equities and cash. Was this a good move or should i consider something else.  My asset allocation is currently 40% cash,40%equities, and 20% bonds.

You expressed doubts about your recent action of buying some bonds. Why you are expressing these doubts I don't know? Perhaps you were "SOLD" the bondsand they were not purchased after a thorough review of your status. Its tough to give advice to someone who is unknown to the writer. Your asset allocation seems a bit too heavy in fixed income, but that partly depends upon one's temperment. Your cash portion also seems high but how much of that is for a reserve for everyday contingencies and how much is a reserve for purchases of equities at perhaps less lofty levels? Are you still working and if so, how long do you expect to work.? What are the other sources of income?

Your bond portion perhaps could be spread over three to five issues with staggered maturities such as some due in 3, 6, 9, and 12 years or so. As they mature you will invest at the then current levels but you would have a fairly stable income.

Your specific Federal Home Loan Bank Notes, 7.10% due February 22, 2011 are rated 'AAA'. Note that according to the Bloomberg bond data the maturity is shown as February 7. I couldn't find a February 22 maturity date but perhaps I missed it. In any case, they are issued by a U.S. Government sponsored enterprise (GSE). They are not guaranteed by the federal government and the resources for payment come from its operations. However, while there is no explicit federal backing, market participants believe that if anything were to go wrong then the Feds would come to its rescue.

This is a relatively small issue -- $50 million -- which may be more difficult to sell in the secondary market if you have to do so. I also imagine that as an individual investors you bought an odd lot, i.e., fewer than $1 million face amount which may mean a slightly lower price in case of a sale. The notes offer little call protection. They are discretely callable. That is, they are callable only on specific dates. This issue is callable on 10 days notice from the issuer each February 7th and August 7th starting with the 8/7/96 call date at a price of 100% of par or face value. As long as interest rates don't improve from current levels there is small likelihood that the issue will be called away from you. But if rates decline again the chances of premature redemption increase. The issue will be called by FHLB when it is in their best interests, not the interest of the investor. While I can not tell you where rates are headed, this could end up being a shorter term investment than you originally believed. Don't be led astray by the maturity being 15 years away.

You bought a bond with a relatively higher yield than bonds of similar maturity and quality. The main reason for the greater yield is the lack of call protection with some of the remaining difference due to the the GSE status, issue size and other technical factors. If you will look at the Treasury bond tables, you will see that there are no non-callable coupon issues due in 2011. If there were they would probably be quoted around a yield to maturity in the range of 6.35% to 6.50% . Your bonds are around the 7.30 to 7.35% area. Is it better to have the FHLB issue for one, two or three years until it is called (I doubt that it will live to maturity) or a lower yielding Treasury issue where you are more assured of the coupon to maturity?

I hope this has been helpful. Bond investing isn't easy. Even with Government bonds there are many things to ponder.

I have a considerable portfolio and I am nervous about the stock market at these levels. I would like to know what is your advice on setting up a portfolio of bonds that will give off income and preserve capital for the long term? What should I buy to accomplish Income and hold on to capital? 

In view of your goals of income and capital preservation as well as your nervousness with the level of the equity market, I suggest a fairly simple portfolio of high grade (AAA and AA rated) bonds. If you have a tax problem then it would be in tax exempt issues. If you have a tax-exempt fund such as a pension plan of some type, then I would look at taxable issues--corporates, Treasuries and agencies.

Use a ladder maturity approach with bonds maturing every two years or so out to about 10 to 12 years, This way you will have bonds maturing every couple of years being rolled over into new bond investments at whatever level interest rates are at that time.

You do not have to put all of your money to work at one time. You may wish to invest your assets as you sell stocks or, if you have a lump sum, over a period of a couple of months. Your manner of investing is whatever way you feel comfortable with. Perhaps you take a position in a stock over several trades over a period of weeks. You might want to do the same in bonds, assuming you are dealing with large liquid issues.

Just because your salesman offers you an issue that may meet your credit quality parameters doesn't mean you have to buy it. There may be some names that you may not feel comfortable with. In that case, look for something else.

However, make sure that you know about the credit quality of the bonds you are buying. Is the issuer or issue on a rating agency's watch list? If so, what is the possible direction of the rating? What are the interest payment dates, the maturity date, call, refunding and sinking fund dates (if any) and these provisions. What are the options for additional or increase sinking fund payments? What is the tax status of the issue. Treasuries are exempt from state income taxes. If a tax-exempt issue, is the interest subject to alternative minimum tax (AMT) treatment?. Is a prospectus or offering circular available? If so, get it and read it.

If investing in corporate names, I would stick with issues with a minimum size of at least $100 million and preferable $150 to $200 million. A NYSE listing may also give you comfort for at least you will see prices from time to time to help you keep track. I would avoid agency issues of less than the same amounts. Since you are a stock market investor, consider keeping some of your stock proceeds in cash reserves for possible reinvestment into equities when they again reach levels that you feel are attractive.

The above suggestions are given without the benefit of knowing any details your age, work status, income tax bracket, ability to assume risk, etc. But bond investing can be complex. Know the terms and provisions of the issues you are buying before you invest.

We have an estate in which i'm an executor.  There is a sizeable amount of bonds left to us.  All series EE, and in 500.00 1000.00 and 10,000.00 dollar denominations.  My question is how can we ( the 2 executors) properly redistribute the bonds in the airs names by ourselves without having the attorney. The attorney is handling house, bank acc. Etc. But there is such a sizeable amount of bonds we would like to do this ourselves to save on his commission which I feel is high and is on everything he handles.

It seems as though the deceased did not name a beneficiary on the Series EE bonds when they were purchased or that there were no co-owners. Is that correct? If a beneficiary had been named or there is a co-owner then he or she automatically becomes the owner of the bond. In order to redeem the bond, the beneficiary must present the redemption agent (a bank or savings institution) with a copy of the death certificate of the registered owner.

In the case of bonds registered in the name of the deceased but with no named beneficiary, they become part of the estate. The executor should go to the local bank to see what they require to effect a redemption. Again, you will need at least one copy of the death certificate. I think one will do if all the bonds are redeemed at one time; however, more might be required. You will probably have to show the bank that you are authorized to make the redemption. I believe that the proceeds will have to be payable to the estate and the executors of the estate will write checks to the heirs.

Savings bonds are not transferable. Therefore, the bonds can't be redistributed to the heirs. Also, since they are part of the estate, there may be estate taxes to pay.

What is a CMO. What are the risk characteristics?

CMO stands for Collateralized Mortgage Obligation. Introduced in 1983 as an improvement to the traditional mortgage securities, these are collateralized by pools of residential mortgages. The financial engineers at the issuers (such as Federal Home Loan Mortgage Corporation, Federal National Mortgage Association) divide the CMO into various levels or tranches with different maturities and payment characteristics. The interest and principal payments (including prepayments of principal) are passed through to the holders. Principal payments are made according to a paydown schedule and are generally directed towards one tranche until it is retired and then to the next tranche, and so on sequentially.

When interest rates decline, mortgage payers repay and refinance existing debt with the result CMO holders get their principal repaid earlier than originally scheduled . When rates rise, p-repayments are fewer and the CMO takes longer to be repaid.

Plain vanilla CMO tranches are those that receive principal payments in sequential order. The final tranche, known as the Z-bond or the accrual bond, don't receive any interest or principal payments until all of the other tranches have been paid off. They accrue or accrete interest until principal and interest are available to service these securities. These are much more price sensitive to interest rate movements and are among the most volatile of the mortgage investments.

Some CMOs have a Planned Amortization Class, known as PAC bonds. These amortize according to a predetermined sinking fund schedule thus enhancing the degree of cash flow certainty or stability and transferring to other tranches a greater degree of cash flow uncertainty. Of course, if repayments on the underlying mortgages drastically change from those originally used in the repayment calculations, then the cash flow of the PAC issue could be affected.

There are also Companion Bonds which absorb the variability in principal repayments. When interest rates rise, the average lives of these bonds increase.

In addition, there can be tranches that pay Interest Only (IOs) or Principal Only (POs). These are extremely sensitive to mortgage repayments and are suitable for only the most risk oriented mortgage investors.

Fitch Investors Service is one rating agency applying volatility ratings to CMO securities. These ratings are opinions as to the relative sensitivity of the security's price and cash flows to changes in interest rates. Ratings of V-1 and V-2 have low market risk, exhibit interest rate risk comparable to short duration Treasuries, and perform consistently across a range of rate scenarios. On the other hand, High to Speculative Risk categories, V-8, V-9 and V-10, experience sharp, severe variations in performance across a range of interest rate scenarios. They have extreme sensitivity to interest rate movements.

CMOs have many different risk and reward characteristics. They can be quite complex instruments with many of the tranches unsuitable for most individual investors, in my opinion. You should carefully read the quite wordy offering memorandum and get the risk rating from your salesperson before committing to a CMO investment. Some tranches may have very limited marketability later on.

We are looking for input on yield calculation of floating rate bonds in high-volatility/high inflation markets. Specifically what are your suggestions for comparing floating rate yields to fixed rate yields in these conditions?

Suggest you look at the following books for more information regarding floating rate yields.

CORPORATE BONDS: Structures and Analysis by Wilson and Fabozzi, 1996 Frank J. Fabozzi Associates. Section 2 deals with bond pricing and yield measures.

Fabozzi's THE HANDBOOK OF FIXED INCOME SECURITIES, 4th Edition (Irwin) may also be helpful.

Fabozzi also edited FLOATING RATE INSTRUMENTS: Characteristics, Valuation and Portfolio Strategies (Probus Publishing 1986). This has a couple of chapters on evaluating floating rate notes.

In addition, there are several books in the market on bond math including one by Frank J. Fabozzi.

These books ought to give you the input you need for yield calculations for floaters.

Funds such as Invesco high yield, TRowe high yield etc. looking at high yield plus appreciation on theory that the interest rates will drop before the end of the year.   What do you think (a) of the idea in general and (b) safety of the investments?

I don't think too much of your plan to buy high yield mutual funds on the theory that rates will be lower at year end and thus you will get principal appreciation and high yield. Rates have been rising for several months and the long T-bond just got over 7%. How high will it go and when? Interest rate forecasting is a tough game. Last night on Rukheyser (?) Wall Street Week one of the panelists said rates will stay in the 7 to 7.25% ranges for a while before going down again. That's nice and may happen. The speaker has a good stock picking record. On the other hand The Wall Street Journal has a semi-annual poll of economists about interest rate projections. Of the 28 surveys since June 1982, there were only eight in which they got the direction correct according to Ryan Labs research. What about if rates continue up to 7 1/2% or higher and don't drop as much as you would like? You will be starting behind the 8 ball.

High yield bonds are less sensitive to interest rate movements than high grade bonds. If you are interested in speculating on interest rate movements, why not by Treasury STRIPS or futures and really get a bang for your buck.

If you go into high yield funds then you should have a longer term perspective, not a short term play. The funds offer high yield because they invest in speculative grade bonds, those rated Ba and BB and lower by the rating agencies. They have the lower ratings because the risk of default is greater than more secure bonds. You do get diversification and "professional management" which can reduce risk but one can't call them safe investments. The funds you mention are decent with good records over the last one year and five years to 12/31/95 but for the ten years they returned 9.37% annually for Invesco and 9.11% for Price, lower returns than for the Lehman Corporate Index or the average junk fund according to Charles Schwab.

If bond prices and yields are inversely related, why are increasing bond prices considered a good thing?

When bond prices go down, yields go up. When bond prices increase, yields go down. It is like a see saw. One side is up and the other is down.

Therefore, when bond prices increase yields decline. This is considered a good thing because when interest rates tend to go down, it becomes cheaper for companies to borrow. When rates are high, consumers and business tend to borrow less. If they borrow less, then they tend to spend less. Thus lower interest rates encourages spending.

Residential housing tends to do better when rates are lower. Are you more inclined to buy a new house or a new car when interest rates are at 15% or when they are at 7%?

Corporations have more projects that are profitable when interest rates are 7% than when they are at 15%.

In summary, increasing bond prices are considered a good thing and declining bond prices are considered a bad thing, unless, of course, you are the devil! (humor intended)

Looking for international brady bonds and ratings and returns.

I would suggest that you visit the new Bradynet Web Site at www.bradynet.com. I believe you will be able to get most of the information you are looking for from this group.

I have about 150 junk bonds in my portfolio. I buy some each week. As you know the market has been against me and I am in no hurry, it seems to be changing some now. Do you inventory bonds or broker them?

We are not a registered broker and do not inventory bonds. If I can be of assistance and any other form, please do not hesitate to send a question.

I was doing some reading in bonds related topics and stumbled across some concepts that still puzzle, please enlighten on the following questions:  Q1.)The rationale of benchmarking a portfolio to a widely publicized local bond index, besides the seeming obvious function as a standard to which performance is relatively evaluated.   Q2.)By so benchmarking to the bond index, does it reveal other parameter measures such as volatilities and liquidities? Q3.)How are the inputs of risk measures of Duration, Mod. Duration, and Convexity being used in the process of formulating one's portfolio strategy?

Your question is complex and requires more than what I can say here. I suggest that you expand your reading to a good book or books on portfolio management in practice and in theory. The main purpose of benchmarking a portfolio to an index is to provide the portfolio manager with a guideline as to his relative performance. If the portfolio can not beat the index selected, then perhaps it should buy the index and the manager should get sacked. However, selecting the proper index or indices is important as is the weighting one gives them. If your fund is an intermediate term investment grade corporate portfolio, then it should be measured against an intermediate term corporate index such as Lehman Brothers of Merrill's. The index should reflect your portfolio. If you maintain 25% cash type investments, then the benchmark ought to reflect that, in my opinion. Duration, convexity etc. are measures of price volatility and inter state risk. Knowing the duration of a bond or a bond portfolio reveals how sensitive it is to changes in interest rates.

Again, this is a meaty subject and too much for complete explanation here.

I would like to know about the interest rate on Canadian savings bonds and any other low risk bonds or investments you could suggest.

I don't have access to information on Canadian Savings Bonds. You may want to do a search in the Internet or call any major bank in Canada for the current interest rates.

As far as any other low risk bonds, I would assume your interested in Treasury securities or AAA rated general obligation municipal bonds. You can also try a municipal bond fund or government fund.

There is plenty of information available on all these investments on the Internet. Make sure visit the other pages of BONDS ONLINE to see if we have what you are looking for.