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Bonds 109: US Government Agency Bonds

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1.
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.
2.
One advantage of government agency bonds is _______.
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Higher return potential than that of Treasury securities. Agency bonds generally offer higher returns than Treasury securities do, along with higher volatility as the market for these securities responds to changes in mortgage rates.
3.
Freddie Mac bonds are perceived as safer than Ginnie Mae bonds.
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False. Ginnie Mae securities are perceived as safer from default than Freddie Macs.
4.
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.
5.
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.