Fixed-Income Securities: Features and Types

Chapter 6 gives students the product vocabulary needed before they move into bond pricing and trading. It starts with the fixed-income marketplace and then compares issuer types, contract features, specialized debt instruments, and the shorthand used in quotes and ratings.

This chapter should be read as a classification chapter. Many exam questions ask students to tell similar-looking instruments apart by issuer strength, cash-flow structure, ranking, tax treatment, or embedded features.

Exam Focus

• Distinguish Government of Canada, provincial, municipal, Crown, and corporate debt by credit support and market role.
• Separate bond features that affect promised cash flow from factors that affect credit quality or liquidity.
• Read quotes and ratings as condensed information about maturity, coupon, price, and default risk.

In this section

• The Fixed-Income Marketplace and Its Participants
  How the Canadian fixed-income market is structured, who participates in it, with money-market and capital-market instruments differ.
• Bond Features, Yields, and Terminology
  Face value, coupon, maturity, yield, term, liquidity, and legal bond structure so fixed-income questions become easier to classify.
• Government of Canada Securities
  Treasury bills, marketable bonds, benchmark status, federal issuance, and why Government of Canada debt anchors the Canadian fixed-income market.
• Provincial, Municipal, and Crown Securities
  Comparison of sub-sovereign issuers in Canada, including provincial debt, municipal borrowing, Crown issues, spreads, and liquidity differences.
• Corporate Bond Types and Features
  Comparison of secured bonds, debentures, subordinated debt, convertibles, call features, and credit-spread behaviour in the Canadian corporate bond market.
• Other Fixed-Income Products and Instruments
  Floating-rate notes, strip bonds, money-market alternatives, deposit products, and pooled fixed-income vehicles beyond standard bonds.
• Bond Quotes, Credit Ratings, and Benchmarking
  How bond quotes are read, how clean and dirty prices differ, what ratings communicate, with benchmark indices are used.