All Courses > Bonds > 100
Bonds 109: US Government Agency Bonds

Test your knowledge

Choose wisely. There is only one correct answer to each question.

0%
Keep studying!
Review your answers below to learn more.
1.
Homeowners are least likely to prepay their mortgages when they _______.
Choose wisely. There is only one correct answer.
Take out a home equity loan. Homeowners may prepay their mortgages when they sell their homes, refinance themespecially if mortgage interests rates fallor when they simply decide to pay down the principal.
2.
The minimum initial investment in a Ginnie Mae bond is _______.
Choose wisely. There is only one correct answer.
$25,000. The minimum investment for a Ginnie Mae is generally $25,000, although you sometimes can buy them for less than $25,000 on the secondary market, as well as through shares in mutual funds or investment trusts that invest in Ginnie Maes.
3.
Which of the following issue government agency bonds?
Choose wisely. There is only one correct answer.
Government National Mortgage Association, Federal National Mortgage Association, World Bank agencies. The Government National Mortgage Association (GNMA) and the Federal National Mortgage Association (FNMA), along with other agencies including World Bank-related agencies and those that package student loans, all offer government agency bonds.
4.
The extension risk increases the amount of money the investor has to buy other securities at a time of high interest rates.
Choose wisely. There is only one correct answer.
False. The extension risk reduces the amount of money the investor has to buy other securities at a time of high interest rates, as the investor's bond pays more slowly when payment of the home mortgages in the pool is extended longer than planned.
5.
Congress created Fannie Mae during _______.
Choose wisely. There is only one correct answer.
The Great Depression. Congress created the Federal National Mortgage Association in 1938 to make more dollars available for home loans to middle- and low-income citizens.