How shall I evaluate the risks of a guarantee?

You need to assess if the value of the guarantee is appropriate for you. To help you do this you should at least understand the answers to these questions:

  • Can you afford to lock up your money until the end of the guarantee period?
  • How reliable are the guarantors providing the guarantee to the PPN managers and the investors?
  • Is the security backing the guarantee adequate?
  • Is the PPN insured by the Canadian Deposit Insurance Corporation or the Régie de l’assurance- dépôts du Québec?

Note: With some PPNs, you might receive little or no profit on your investment.

Related Questions