Municipal Security

<body onLoad="MM_checkPlugin('Shockwave Flash','','http://www.riskglossary.com/default_nofl.htm',false);return document.MM_returnValue" stylesrc="../_private/template.htm" bgcolor="#FFFFFF" link="#669933" vlink="#000000" alink="#000000"> <div align="left"> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table1"> <tr> <td width="740"> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" height="37" id="table2"> <tr> <td height="35" width="100%"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="0" id="table3"> <tr> <td width="100%" align="left" valign="top"> <p class="header_gold">Municipal Security</td> <td width="45" align="right" valign="bottom"> <map name="FPMap6"> <area href="http://www.contingencyanalysis.com" shape="rect" coords="1, 0, 44, 11" target="_top"> </map> <img border="0" src="../images/home.gif" usemap="#FPMap6" width="45" height="12"></td> </tr> </table> </td> </tr> <tr> <td width="100%" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td width="0%" valign="top" bgcolor="#FFFFCC"> <table border="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="0" cellspacing="1" id="table4"> <tr> <td width="100" align="left" valign="top"> <p class="header2_black">Explained:<br> <img border="0" src="../images/blank_1x100.gif" width="100" height="1"></td> <td width="190" align="left" valign="top"><p class="word_list"> <a href="#AMT bonds">AMT bond</a><p class="word_list"> <a href="#Auction Rate Securities">auction rate security</a><p class="word_list"> <a href="#Bond anticipation notes">bond anticipation note</a><p class="word_list"> <a href="#general obligation bonds">general obligation bond</a><p class="word_list"> <a href="#Grant anticipation notes">grant anticipation note</a><p class="word_list"> <a href="#Marginal tax rate">marginal tax rate</a><p class="word_list"> <a href="#munis">muni</a><p class="word_list"> <a href="#municipal bonds">municipal bond</a><p class="word_list"> <a href="#Municipal notes">municipal note</a><p class="word_list"> <a href="#Municipal securities">municipal security</a><br> <img border="0" src="../images/blank_1x160.gif" width="160" height="1"></td> <td width="100%" align="left" valign="top"><p class="word_list"> <a href="#private activity bonds">private activity bond</a><p class="word_list"> <a href="#Refunded bonds">refunded bond</a><p class="word_list"> <a href="#Revenue anticipation notes">revenue anticipation note</a><p class="word_list"> <a href="#Revenue bonds">revenue bond</a><p class="word_list"> <a href="#Tax and revenue anticipation notes">tax and revenue anticipation note</a><p class="word_list"> <a href="#Tax anticipation notes">tax anticipation note</a><p class="word_list"> <a href="#Tax-backed bonds">tax-backed bond</a><p class="word_list"> <a href="#tax-equivalent yield">tax-equivalent yield</a><p class="word_list"> <a href="#tax-exempt bond">tax-exempt bond</a><p class="word_list"> <a href="#Variable rate demand obligations">variable rate demand obligation</a><br> <img border="0" src="../images/blank_1x160.gif" width="160" height="1"></td> </tr> </table> </td> </tr> </table> <table border="0" cellpadding="0" style="border-collapse: collapse" bordercolor="#111111" width="310" align="right" id="table5"> <tr> <td align="right" width="9" height="14"></td> <td width="300" height="14"> <font size="2"> </font><font size="4"> </font></td> </tr> <tr> <td align="right" width="9"> </td> <td width="300"> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script>  </td> </tr> </table> <p class="body"><b><a name="Municipal securities">Municipal securities</a></b> (or <b><a name="munis">munis</a></b>) are <a href="../articles/security.htm">exempt</a> debt <a href="../articles/security.htm">securities</a> issued by state and local governments in the United States and its territories. They include securities issued by agencies or authorities established by those governments. Munis are used to fund items such as infrastructure, schools, libraries, general municipal expenditures or <a href="../articles/callable_bond.htm">refundings</a> of old debt. </p> <p class="body">When the United States introduced a federal income tax in 1913, the taxability of interest from municipal securities was challenged based on the constitutional principal of states' rights. That argument was upheld by the Supreme Court for much of the twentieth century but was finally rejected in a 1983 case. Today, congress has a right to tax interest income from municipal securities, but it currently chooses not to. Many states also exempt their securities from their own taxes, which makes those securities particularly attractive investments for their own residents. Of course, capital gains from buying or selling munis in the secondary market are fully taxed.</p> <p class="body">Because of their tax-exempt status, munis have <a href="../articles/yield.htm">nominal yields</a> below those of <a href="../articles/corporate_bond.htm">corporate bonds</a> or <a href="../articles/treasury_note_and_bond.htm">Treasury bonds</a>. To compare a muni's <a href="../articles/yield.htm">yield</a> to that of a taxable bond, investors calculate the muni's <b> <a name="tax-equivalent yield">tax-equivalent yield</a></b> using the <a name="[1]">formula</a></p> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="0" height="36" id="table6"> <tr> <td width="100%" align="center"> <img border="0" src="../formulas/municipal_securities_[1].gif" width="263" height="40"></td> <td width="5%" align="right">[1]</td> </tr> </table> <p class="body">This indicates the yield a taxable bond would have to earn in order to match, after taxes, the yield available on the untaxed muni. Here <b>m<a name="Marginal tax rate">arginal tax rate</a></b> is the tax rate that would apply to one additional dollar of income—if the investor earned one additional dollar, what fraction of that dollar would be lost to federal, state and local income taxes?</p> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="345" align="left" id="table7"> <tr> <td width="336"> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script>  </td> <td width="9"> </td> </tr> </table> <p class="body">Consider an individual investor who pays a marginal tax rate of 34% due to federal, state and local income tax. To compare a muni paying 3% with a taxable corporate bond paying 4%, she would apply formula [<a href="#[1]">1</a>] to obtain a tax-equivalent yield for the muni of 4.55%. Barring other factors, she would likely invest in the muni, since its tax-equivalent yield is superior to the 4% yield on the corporate.</p> <p class="body">Obviously, tax-equivalent yield depends on the investor's marginal tax rate. If a property and casualty insurance company is losing money, its marginal tax rate will be 0%. If it compares the same muni paying 3% and corporate paying 4% as in the previous example, it would apply formula [<a href="#[1]">1</a>] to obtain a tax-equivalent yield for the muni of 3%. Barring other factors, the company would probably invest in the corporate.</p> <p class="body">Munis are not always tax exempt. Interest on some munis is taxed under the Alternative Minimum Tax (AMT). These are called <b> <a name="AMT bonds">AMT bonds</a></b>. If a municipality issues debt to fund a commercial enterprise, such as a shopping mall or sports stadium, the securities are called <b><a name="private activity bonds">private activity bonds</a></b>. To prevent municipalities from engaging in tax arbitrage—issuing debt at tax-free yields while earning a commercial <a href="../articles/return.htm">rate or return</a> on the proceeds—interest on private activity bonds is taxable.</p> <p class="body">To preclude tax arbitrage by securities dealers, any interest paid to finance a position in munis is not deductible as a business expense.</p> <p class="body">Unlike, the Federal government, which can print money, municipalities cannot. This means that munis entail <a href="../articles/credit_risk.htm">credit risk</a>. There have been a number of spectacular municipal bankruptcies, so the risk of default is real. Munis are <a href="../articles/credit_risk.htm">rated</a>, just like corporate bonds, with ratings varying from AAA to D. Some munis are issued with <a href="../articles/credit_enhancement.htm">credit enhancement</a>. This may include credit insurance or a bank guarantee, such as a letter of credit.</p> <p class="body">Long-term munis are called <b><a name="municipal bonds"> municipal bonds</a></b>. These typically pay semiannual <a href="../articles/coupon_bond.htm">coupons</a>, but some are <a href="../articles/zero_coupon_bond.htm">zero-coupon</a> or <a href="../articles/zero_coupon_bond.htm">accrued-coupon</a> bonds. These instruments fall into two general categories:</p> <p class="body"><img border="0" src="../images/bullet.gif" width="20" height="10"><b><a name="Tax-backed bonds">Tax-backed bonds</a></b> are backed by anticipated tax, penalty or fee revenue. These instruments include <b><a name="general obligation bonds">general obligation bonds</a></b>, which are baked by the general tax revenue of the issuer. Some are are structured like a <a href="../articles/securitization.htm">securitization</a> of specific revenues, such as sales taxes or fees. There are also a number of structures issued by state or local agencies with some sort of credit enhancement from the state or local government. </p> <p class="body"><img border="0" src="../images/bullet.gif" width="20" height="10"><b><a name="Revenue bonds">Revenue bonds</a></b> are issued to finance specific revenue-producing projects, such as toll roads, airports, public housing or higher education. Interest and principal are paid out of revenue from the project. The bonds are classified by project type, so you will hear of utility revenue bonds, hospital revenue bonds, transportation revenue bonds, housing revenue bonds, etc.</p> <p class="body">A third category of municipal bond is refunded bonds.</p> <p class="body"><img border="0" src="../images/bullet.gif" width="20" height="10"><b><a name="Refunded bonds">Refunded bonds</a></b> (also called <b>prerefunded bonds</b>) are tax-backed or revenue bonds that the issuer has allocated funds to fully retire. The issuer hasn't retied the debt yet, either because it is not yet <a href="../articles/callable_bond.htm"> callable</a> or for some other reason. Instead, the issuer has used the allocated funds to buy an offsetting portfolio of <a href="../articles/coupon_bond.htm">bonds</a>, which are placed in escrow or a trust for the benefit of bondholders. The portfolio may hold <a href="../articles/treasury_securities.htm">Treasury securities</a>, <a href="../articles/agency_securities.htm">agency securities</a> or other high-quality debt. It is structured so its cash flows offset the cash flows due on the refunded bonds. This may be done in anticipation of the bonds being called at the first opportunity, or it may be done assuming that the bonds will be outstanding until maturity. Because they are fully baked by high-quality <a href="../articles/collateral.htm">collateral</a>, refunded bonds tend to have excellent <a href="../articles/credit_risk.htm">credit quality</a>.</p> <p class="body">Municipalities issue a number of shorter-term instruments. Most common are municipal notes.</p> <p class="body"><img border="0" src="../images/bullet.gif" width="20" height="10"><b><a name="Municipal notes">Municipal notes</a></b> have maturities from three months to three years. Some are issued as <a href="../articles/discount_instrument.htm">discount instruments</a>, but most are coupon bearing. Typically, notes are issued to address mismatches in the timing of expenditures and offsetting revenues. <b><a name="Tax anticipation notes">Tax anticipation notes</a></b> (TANs) are issued in anticipation of tax revenues. <b> <a name="Revenue anticipation notes">Revenue anticipation notes</a></b> (RANs) are issued in anticipation of other revenues, such as federal aid. <b> <a name="Tax and revenue anticipation notes">Tax and revenue anticipation notes</a></b> (TRANs) anticipate either tax and/or other revenue. <b> <a name="Grant anticipation notes">Grant anticipation notes</a></b> (GANs) are issued in anticipation of receiving a grant. <b> <a name="Bond anticipation notes">Bond anticipation notes</a></b> (BANs) are issued in anticipation of funding from the issuance of municipal bonds. Most notes are issued with credit enhancement, such as a bank letter of credit.</p> <p class="body">In the past, municipalities used <a href="../articles/commercial_paper.htm">commercial paper</a> to meet much of their short-term funding needs. This had the advantage that municipalities didn't have to perform a new public offering each time they issued short-term debt. Municipal issuance of commercial paper was severely restricted by the 1986 Tax Reform Act. Since then, municipalities have turned to various <a href="../articles/floater.htm">floating rate</a> instruments, which were first employed in the 1970s. These have long maturities, so issuers can have infrequent offerings. They also have <a href="../articles/liquidity.htm">liquidity</a> features that make them essentially money market instruments.</p> <p class="body"><img border="0" src="../images/bullet.gif" width="20" height="10"><b><a name="Variable rate demand obligations">Variable rate demand obligations</a></b> (VRDOs), also called <b> <a name="variable rate demand notes">variable rate demand notes</a></b> (VRDNs), are floating rate instruments with <a href="../articles/coupon_bond.htm"> terms</a> of as much as 40 years. They pay interest monthly or quarterly based on a floating rate that is reset daily or weekly based on an index of short-term municipal rates. VRDOs are purchased at <a href="../articles/par_value.htm">par</a>. Liquidity is provided with a <a href="../articles/option.htm">put</a> feature, which allows the holder to put the the security for par plus <a href="../articles/bond_accrued_interest.htm">accrued interest</a> on any interest rate reset date, usually with one or seven days notice. A remarketing agent—a bank or other entity—serves as liquidity provider. VRDOs are put back to it rather than the issuer. The remarketing agent tries to resell those VRDOs or, failing that, holds them in its own inventory. VRDOs almost always have credit enhancement—either a letter of credit from the remarketing agent or bond insurance. The issuer generally has an <a href="../articles/option.htm">option</a> to convert a VRDO to a fixed rate instrument. Due to the put feature, tax-exempt money market funds generally can hold VRDOs.</p> <p class="body"><img border="0" src="../images/bullet.gif" width="20" height="10"><b><a name="Auction Rate Securities">Auction rate securities</a></b> (ARS) are structured much like VRDOs, but rates are reset and liquidity is provided through a periodic Dutch auction. Investors who wish to acquire an ARS submit bids in that auction. Investors who already hold the ARS have a choice to hold (agree to receive whatever rate is set in the auction), bid (bid in the auction, and relinquish their holding if their bid is not accepted), or sell (redeem their investment at par plus accrued interest, irrespective of auction results). For tax-exempt ARS, auctions are typically held every 7, 28 or 35 days. Interest is usually paid the day after the auction, but less frequent coupon dates are possible. Instruments usually have some form of credit enhancement. Tax-exempt money market funds generally can't hold ARSs.</p> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="345" align="right" id="table8"> <tr> <td align="right" width="9"> </td> <td width="336"> <script type="text/javascript"></script> <script type="text/javascript" src="http://pagead2.googlesyndication.com/pagead/show_ads.js"> </script>  </td> </tr> </table> <p class="body">While VRDOs and ARSs are unusual, most municipal securities are issued as traditional public offerings. There is an active <a href="../articles/exchange_traded.htm">over-the-counter</a> secondary market for munis. Tax exempt investors, such as pension plans, don't generally invest in munis. Most munis are held by property and casualty insurance companies, wealthy individuals who have the highest marginal tax rate, and mutual funds that invest exclusively in munis. Banks or other dealers also hold inventories of municipal securities.</p> <p class="body">The phrase <b><a name="tax-exempt bond">tax-exempt bond</a></b> refers to any bond whose interest is not subject to taxation by one or more authorities. In the United States, the term is often used synonymously with municipal bonds. However, non-profit entities like hospitals and museums also issue bonds that are tax exempt. These are structured much like munis, and they are sold to mostly the same investors.</p> <table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table9"> <tr> <td height="30" valign="bottom" colspan="2"> <p class="header2_black">Related Internal Links</td> </tr> <tr> <td colspan="2" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td bgcolor="#FFFFCC" colspan="2"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="6" id="table10"> <tr> <td width="100%"> <p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/agency_securities.htm">agency security</a> A security issued by a US federal agency or government sponsored enterprise.</p> <p align="left" class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/coupon_bond.htm">bond</a> Securitized debt.</p> <p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/bond_accrued_interest.htm">bond accrued interest</a> Interest that is earned but not yet paid on a bond.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/book_entry_registered_bearer_bonds.htm">book-entry, registered and bearer bonds</a> Three forms of bonds differing in how ownership is evidenced.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><strong style="font-weight: 400"><a href="../articles/callable_bond.htm">callable bond</a> </strong>A bond which allows the issuer to repurchase the bond for a specified price on certain dates prior to the bond's maturity.<p align="left" class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><strong style="font-weight: 400"><a href="../articles/corporate_bond.htm">corporate bond</a> A bond issued by a corporation.</strong></p> <p align="left" class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><strong style="font-weight: 400"><a href="../articles/credit_risk.htm">credit risk</a> Risk</strong> due to uncertainty in a counterparty's ability to meet its obligations.</p> <p align="left" class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/floater.htm">floater</a> A fixed income instrument whose coupon fluctuates with some designated reference rate.</p> <p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/international_bonds.htm">international bond</a> Any bond issued or invested in across national boarders.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/par_value.htm">par value</a> A stated value for a security.</p> <p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/record_date.htm">record date</a> the date on which the owners of a security are identified for the purpose of making an upcoming interest or dividend payment.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/security.htm">security</a> A financial instrument such as a stock or bond.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><strong style="font-weight: 400"><a href="../articles/sinking_fund.htm">sinking fund</a> A provision that requires an issuer of bonds or preferred stock to retire some of the issue each year.</strong><p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/treasury_securities.htm">Treasury security</a> US Federal Government debt obligation issued by the Department of Treasury.</p> <p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/united_states_financial_regulation.htm">United States financial regulation</a> An overview.<p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><strong style="font-weight: 400"><a href="../articles/yield.htm">yield</a> Any of several metrics of the income or return to be earned from an investment.</strong><p class="explanatory_text"> <img border="0" src="../images/bullet_link_glossary.gif" width="26" height="15"><a href="../articles/zero_coupon_bond.htm">zero-coupon bond</a> A bond that pays no coupons, pays its par value at maturity and is issued at a discount.</td> </tr> </table> </td> </tr> <tr> <td height="30" valign="bottom" colspan="2"> <p class="header2_black">Related Books</td> </tr> <tr> <td colspan="2" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td bgcolor="#FFFFCC" colspan="2"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="6" id="table11"> <tr> <td width="100%"> <p class="explanatory_text">Fabozzi (<a target="_blank" href="http://www.riskbook.com/link/fabozzi_frank_(2000).htm">2005</a>) and Fabozzi (<a target="_top" href="http://www.riskbook.com/link/fabozzi_f_(2002)_financial_instruments.htm">2002</a>) both have detailed discussions of municipal securities.</p> <table border="0" cellpadding="4" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table12"> <tr> <td width="100" align="left" valign="top"> <map name="FPMap587"> <area target="_blank" href="http://www.riskbook.com/link/fabozzi_frank_(2000).htm" shape="rect" coords="0, 0, 83, 124"> </map> <img border="0" src="../images/book_fabozzi_f_(2000)_125.gif" usemap="#FPMap587" width="84" height="125"></td> <td align="left" valign="top"> <table border="0" cellpadding="1" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table13"> <tr> <td width="90%" colspan="3"> <p class="title"> <a target="_blank" href="http://www.riskbook.com/link/fabozzi_frank_(2000).htm"> Handbook of Fixed Income Securities</a></td> </tr> <tr> <td colspan="3"> <p class="author"><b>Frank J. Fabozzi</b></td> </tr> <tr> <td width="10%"> <map name="FPMap588"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 0, 89, 15"> </map> <img border="0" src="../images/star_5.gif" usemap="#FPMap588" width="90" height="16"></td> <td width="10%" class="author">quality</td> <td width="70%"> <p class="author"> </td> </tr> <tr> <td width="10%"><map name="FPMap589"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="0, 0, 89, 15"> </map> <img border="0" src="../images/tech_2.gif" usemap="#FPMap589" width="90" height="16"></td> <td width="10%" class="author">technical</td> <td width="70%">  </td> </tr> <tr> <td width="10%"> <p class="author">2005</td> <td width="10%"> </td> <td width="70%"> <p align="center"><map name="FPMap590"> <area target="_blank" coords="0, 0, 145, 19" shape="rect" href="http://www.riskbook.com/link/fabozzi_frank_(2000).htm"> </map> <img border="0" src="../images/pointer_review.gif" usemap="#FPMap590" width="146" height="20"></td> </tr> </table> </td> </tr> </table> <table border="0" cellpadding="4" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table14"> <tr> <td width="100" align="left" valign="top"> <map name="FPMap706"> <area target="_blank" href="http://www.riskbook.com/link/fabozzi_f_(2002)_financial_instruments.htm" shape="rect" coords="0, 0, 82, 124"> </map> <img border="0" src="../images/book_fabozzi_f_(2002)_financial_instruments_125.gif" usemap="#FPMap706" width="83" height="125"></td> <td align="left" valign="top"> <table border="0" cellpadding="1" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" id="table15"> <tr> <td width="90%" colspan="3"> <p class="title"> <a target="_blank" href="http://www.riskbook.com/link/fabozzi_f_(2002)_financial_instruments.htm"> Handbook of Financial Instruments</a></td> </tr> <tr> <td colspan="3"> <p class="author"><b>Frank J. Fabozzi (ed.)</b></td> </tr> <tr> <td width="10%"> <map name="FPMap707"> <area target="_blank" coords="2, 1, 89, 15" shape="rect" href="http://www.riskbook.com/main/ratings.htm"> </map> <img border="0" src="../images/star_6.gif" usemap="#FPMap707" width="90" height="16"></td> <td width="10%" class="author">quality</td> <td width="70%"> <p class="author"> </td> </tr> <tr> <td width="10%"> <map name="FPMap708"> <area target="_blank" href="http://www.riskbook.com/main/ratings.htm" shape="rect" coords="3, 0, 89, 15"> </map> <img border="0" src="../images/tech_1.gif" usemap="#FPMap708" width="90" height="16"></td> <td width="10%" class="author">technical</td> <td width="70%">  </td> </tr> <tr> <td width="10%"> <p class="author">2002</td> <td width="10%"> </td> <td width="70%"> <p align="center"><map name="FPMap709"> <area target="_blank" coords="0, 0, 145, 19" shape="rect" href="http://www.riskbook.com/link/fabozzi_f_(2002)_financial_instruments.htm"> </map> <img border="0" src="../images/pointer_review.gif" usemap="#FPMap709" width="146" height="20"></td> </tr> </table> </td> </tr> </table> </td> </tr> </table> </td> </tr> <tr> <td height="30" valign="bottom" colspan="2"> <p class="header2_black">Sponsored Links</td> </tr> <tr> <td colspan="2" bgcolor="#CC9966" height="2"> <img border="0" src="../images/blank_2x2.gif" width="2" height="2"></td> </tr> <tr> <td bgcolor="#FFFFCC" width="75"> <img border="0" src="../images/ad_side_banner_2.jpg" width="103" height="285"></td> <td bgcolor="#FFFFCC" width="99%">  <p class="ad_legend" style="margin-left: 0; margin-bottom:2"> <a target="_top" href="http://www.riskexpertise.com/link/advertising.htm"> <font color="#000000">Ads by Contingency Analysis</font></a></p> <p style="margin-top: 0; margin-bottom: 0"> <iframe src="http://servedbyadbutler.com/adserve/;ID=147917;size=336x265;setID=82436;type=iframe" style="margin: 0px; padding: 0px; border-width: 0px" width="336" height="265" frameborder="0" marginwidth="0" marginheight="0" scrolling="no" name="I1"> <![if lt IE 4]> <script src="http://servedbyadbutler.com/adserve/;ID=147917;size=336x265;setID=82436;type=js" type="text/javascript"> </script> <noscript> <a href="http://servedbyadbutler.com/go2/;ID=147917;size=336x265;setID=82436"> <img src="http://servedbyadbutler.com/adserve.ibs/;ID=147917;size=336x265;setID=82436;type=img" border="0" height="265" width="336" alt=""></a> </noscript><![endif]></iframe>   </td> </tr> <tr> <td bgcolor="#FFFFCC" colspan="2"> <table border="0" cellspacing="0" style="border-collapse: collapse" bordercolor="#111111" width="100%" cellpadding="6" id="table16"> <tr> <td width="100%" bgcolor="#FFFFFF"> <p align="center" style="margin-top: 18"><map name="FPMap365"> <area target="_top" href="http://www.riskglossary.com" shape="rect" coords="0, 0, 164, 102"> </map><img border="0" src="../images/logo.jpg" usemap="#FPMap365" width="165" height="103"></p> <p align="center"><span class="verdana10"> <a href="http://www.riskglossary.com/main/disclaimer.htm" target="_self"> Disclaimer</a></span></p> <p align="center">website: <span class="verdana10"> <a target="_top" href="http://www.contingencyanalysis.com"> http://www.contingencyanalysis.com</a></span><br> glossary direct link: <span class="verdana10"> <a target="_top" href="http://www.riskglossary.com"> http://www.riskglossary.com</a></span><br> copyright © Contingency Analysis, 2006<p align="center"><map name="FPMap1"> <area target="_top" href="http://www.contingencyanalysis.com" shape="rect" coords="0, 0, 240, 88"> </map><img border="0" src="../images/logo_glossary_white.gif" usemap="#FPMap1" width="241" height="89"></td> </tr> </table> </td> </tr> </table> </td> <td>  </td> </tr> </table> </div> </body>