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Bonds 109: US Government Agency Bonds

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1.
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.
2.
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.
3.
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.
4.
Compared to Fannie Mae, Freddie Mac _______.
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Is growing faster. Freddie Mac is currently growing faster, partly due to its smaller market share.
5.
The minimum initial investment in a Ginnie Mae bond is _______.
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$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.