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Bonds 108: Introduction to Government Bonds

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1.
Government bonds can mature in as many as _______ years.
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Fifty. Government bonds can actually last fifty years.
2.
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.
3.
How do Treasury notes differ from Treasury bonds?
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Their maturities. Their maturities last from one to ten years, while those of Treasury bonds last longer than ten years.
4.
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.
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 bond maturities can last as long as ________ years.
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Thirty. Thirty years is the maximum maturity.