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Bonds 109: US Government Agency Bonds

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1.
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.
2.
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.
3.
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.
4.
When you invest in a Ginnie Mae bond, you usually receive a monthly payment including _______.
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Interest and principal. Ginnie Mae investors usually receive a monthly payment that includes both interest and a portion of the outstanding principal. Or they may receive monthly payments including only interest, and then receive the principal back when the mortgage matures.
5.
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.