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Course Catalog
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Bonds
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100
Bonds 108:
Introduction to Government Bonds
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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Review your answers below to learn more.
1.
How do Treasury notes differ from Treasury bonds?
Choose wisely. There is only one correct answer.
Their maturities
Their interest rates
Their collateral
Their issuers
Their maturities. Their maturities last from one to ten years, while those of Treasury bonds last longer than ten years.
2.
How often do Treasury bonds pay interest?
Choose wisely. There is only one correct answer.
Monthly
Quarterly
Semi-annually
Yearly
Semi-annually. They pay interest twice per year.
3.
What is the range of maturities of agency bonds?
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One month to one year
Ten to thirty years
One to fifty years
Ten to seventy-five years
One to fifty years. Agency bonds have a very wide range.
4.
Government bonds can mature in as many as _______ years.
Choose wisely. There is only one correct answer.
Two
Ten
Fifty
Seventy-five
Fifty. Government bonds can actually last fifty years.
5.
________ are redeemed by the US government rather than sold on exchanges.
Choose wisely. There is only one correct answer.
Marketable US bonds
Non-marketable US bonds
Mortgage-backed US bonds
Non-marketable US bonds. They are called "non-marketable" because they cannot be sold on markets, and exchanges are markets.
6.
Why were collateralized mortgage obligations introduced to the market?
Choose wisely. There is only one correct answer.
To compete with stocks
To create collateral for government bonds
To keep mortgage bond yields above the rate of inflation
To reduce the prepayment risks that arise from refinanced mortgages
To reduce the prepayment risks that arise from refinanced mortgages. Investors can reduce their risks by choosing different maturities to invest in.
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