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Bonds 109: US Government Agency Bonds

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1.
US government agency bonds historically have provided somewhat higher earnings than Treasury securities.
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True. Over time, Ginnie Maes, Fannie Maes, and Freddie Macs have had somewhat higher yields than Treasury securities.
2.
Fannie Mae and Freddie Mac are former US government agencies that are now privately held companies.
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False. Fannie Mae and Freddie Mac are former US government agencies that are now publicly listed companies.
3.
One way you can purchase your first Ginnie Mae bond for less than $25,000 is _______.
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On the secondary market. You sometimes can buy Ginnie Maes that are selling for less than $25,000 on the secondary market if their interest rates are low compared to more recent issues or if their principals have been substantially reduced.
4.
Of the several risks that US government agency bond investors must consider, perhaps the least likely is ______.
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Risk of default. Government agency bonds are implicitly backed by the faith and credit of the US government.
5.
Ginnie Mae, Fannie Mae, and Freddie Mac all combine mortgages into pools and then issue units in these pools to investors as bonds.
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True. Ginnie Mae, Fannie Mae, and Freddie Mac all buy mortgages from financial institutions that made the loans and group them into pools. They then sell units in these pools to investors by issuing bonds through various financial institutions.