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Income Beginner:
Introduction to Government Bonds
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1.
How do Treasury notes differ from Treasury bonds?
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Their maturities
Their interest rates
Their collateral
Their issuers
Their maturities. Their maturities last from one to ten years, while those of Treasury bonds last longer than ten years.
2.
Which of the following agencies does not issue mortgage-backed securities?
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Fannie Mae
The US Post Office
Freddie Mac
The US Post Office. The others were created for mortgage purposes.
3.
Investors in collateralized mortgage obligations choose interest and principal slices based on their desired ________.
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Yields
Income
Maturities
Maturities. They invest according to the bonds' maturities.
4.
Many investors consider government bonds the safest of all bonds because _______.
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They are not part of the private sector
Many of them have long maturities
They are backed by the credit of the US government
All of the above
They are backed by the credit of the US government. The US government is considered to have the best ability to repay bonds and bond interest.
5.
________ are redeemed by the US government rather than sold on exchanges.
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Marketable US bonds
Non-marketable US bonds
Mortgage-backed US bonds
Non-marketable US bonds. They are called "non-marketable" because they cannot be sold on markets, and exchanges are markets.
6.
Treasury bond maturities can last as long as ________ years.
Choose wisely. There is only one correct answer.
Ten
Twenty
Thirty
Fifty
Thirty. Thirty years is the maximum maturity.
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