Chapter 2 · Types of Securities
Debt and money market securities
Bonds, debentures, treasury bills and the short-dated instruments banks use.
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Debt is a loan. You are promised your money back on a date, with interest along the way. No ownership, no votes, no share of the upside — and paid before shareholders if things go wrong.
| Instrument | Term | Issued by |
|---|---|---|
| Government bond | Years | Government of Nepal, through NRB |
| Debenture | Typically 5–10 years | Banks and large companies |
| Treasury bill | 91, 182 or 364 days | Government, at a discount to face value |
| Certificate of deposit | Months | Banks, to other institutions |
| Commercial paper | Under a year | Large companies, unsecured |
How a treasury bill is priced
A T-bill pays no interest. It is sold below face value and redeemed at face, and the gap is the return.
- Face value Rs 1,00,000, 91 days, bought at Rs 98,300.
- Return = 1,700 ÷ 98,300 = 1.73% over 91 days.
- Annualised = 1.73% × (365 ÷ 91) = 6.93%
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