Your uncle plans to invest his lump-sum pension payment in either money market securities or capital market securities. He has asked you to advise him on the best way to invest his money.

For the money market securities, you are considering the Government of Ghana 182-day Treasury bill. For the capital market securities, you are considering the new bonds Spiderwoman Plc is issuing via a placement next week.

The new bonds from Spiderwoman Plc was announced a couple of days ago in a press briefing. In that press briefing, the President of Spiderwoman Plc, Ms. Amoafo, announced that the new bonds to be offered next week are set up as callable bonds with an annual interest rate of 18.25%.

Required:

1. Explain to your uncle the probable reason behind the setting up of the bond as a callable bond
2. Explain to your uncle the implications of the bond being set up as a callable bond.
3. Differentiate between Treasury notes and Treasury Bonds