THE THREE TYPES OF SECURITIES TRADED

A. Treasury bills
Treasury Bills or T-Bills are money market instruments in the form of issuance of
debt securities by the government to be opened to the public in the short term. These
instruments are often referred to as government bonds. These securities are widely
regarded as low risk and safe investments. The Treasury Department sells T-Bills during
auction using both competitive and non-competitive bidding processes. Non-competitive
bids—also known as non-competitive tenders—are priced based on the average of all
competitive bids received. T-Bills tend to have high tangible net worth.

B. Bank Certificates of Deposit (CDs)

A certificate of deposit (CD) is a product offered by banks and credit unions that
provides an interest rate premium in exchange for the customer agreeing to leave a lump-
sum deposit untouched for a predetermined period of time. Almost all consumer financial
institutions offer CDs, although it's up to each bank which terms it wants to offer, how
much higher the rate will be compared to the bank's savings and money market products,
and what penalties it applies for early withdrawal.

Characteristics of bank certificates of deposit (CDs)

The highest paying certificates of deposit pay a higher interest rate than the best
savings and money market accounts in exchange for leaving funds on deposit for
a certain period of time.
CDs are a safer and more conservative investment than stocks and bonds, offering
lower growth opportunities, but with guaranteed, volatile returns.
Almost every bank, credit union, and brokerage firm offer a menu of CD options.
The rates for the top CDs available nationally are typically three to five times
higher than the industry average for each semester, so shopping around provides a
significant advantage.
Even if you lock the timeframe when you open the CD, there is an option for an
early exit in case you have an emergency or a change of plans.

C. Commercial Paper (CP)—Differing Slightly in Their Default Risk

Marketable securities are a common type of unsecured short-term debt instrument
issued by companies, typically used to finance payroll, accounts payable and inventory,
and meet other short-term obligations. Maturity on commercial paper usually lasts a few
days, and rarely ranges more than 270 days.

Characteristic of Commercial Paper (CP):

Securities are a form of short-term, unsecured debt typically issued by companies
to finance salaries, debt, inventory, and other short-term obligations.
Maturities on most commercial papers range from a few weeks to months, with an
average of about 30 days.
Securities are often issued at a discount without paying a coupon and mature at
face value, reflecting the current interest rate.