Hence the successful issue of a specialized short loan at a low rate of interest should, on balance, assist rather than impede the market in its task. The choice of terms may be inferred from the accompanying table f gilt-edged prices and yields, in hich the stocks are arranged in chronological order of redemption, On our usual assumptions. The present prices of 4% per cent. Conversion, 5 per cent. Conversion, 2% per cent. National Defence and 2% per cent. Conversion stocks suggest that in the next ten years the Government will be faced with refinancing operations in 1940, 1944, 1948, and 1949, although any major change in 5 per cent. Conversion Loan could postpone its eventual redemption as late as 1964. The year 1944 is occupied by the redemption, either optionally or finally, of all four stocks, and this fact suggests that a five-year issue would scarcely suit the market's requirements. There might be a case for matching the Government's official expectation of the length of the war with the issue Of three-year bonds. If so, there is little reason why their coupon rate Should exceed 2% per cent. ever though the effective return might be enhanced by their issue at a small discount,
Text read from the printed page and cleaned; old type leaves the occasional error.