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Bonds 108: Introduction to Government Bonds

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1.
Many investors consider government bonds the safest of all bonds because _______.
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They are backed by the credit of the US government. The US government is considered to have the best ability to repay bonds and bond interest.
2.
Which of the following agencies does not issue mortgage-backed securities?
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The US Post Office. The others were created for mortgage purposes.
3.
Treasury notes are sold through auctions.
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True. They are sold this way, using bids.
4.
Series Electronic EE savings bonds are bought at one half their face value.
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False. They are bought at their full face amounts. Paper EE bonds were bought at one half their face value, but they are no longer offered.
5.
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.
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.