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Bonds 108: Introduction to Government Bonds

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1.
Why were collateralized mortgage obligations introduced to the market?
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To reduce the prepayment risks that arise from refinanced mortgages. Investors can reduce their risks by choosing different maturities to invest in.
2.
What is the range of maturities of agency bonds?
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One to fifty years. Agency bonds have a very wide range.
3.
Treasury note maturities can last as long as ________ years.
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Ten. Ten years is the maximum maturity.
4.
Government bonds can mature in as many as _______ years.
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Fifty. Government bonds can actually last fifty years.
5.
On _______bonds, the owner can defer taxes on interest until the bond is redeemed.
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Series EE. The owner can pay taxes annually or defer taxes on interest until the bond is redeemed.
6.
Treasury bonds are sometimes sold through auctions.
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True. When this happens, their interest rates may change from the original amounts.