Income Beginner: Introduction to Government Bonds

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1.
________ are redeemed by the US government rather than sold on exchanges.
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Non-marketable US bonds. They are called "non-marketable" because they cannot be sold on markets, and exchanges are markets.
2.
Treasury note maturities can last as long as ________ years.
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Ten. Ten years is the maximum maturity.
3.
Why do US government agencies sell bonds?
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To raise money for their operations. Agencies need this money to do their work for the public.
4.
Many investors consider government bonds the safest of all bonds because _______.
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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.
Why were collateralized mortgage obligations introduced to the market?
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To reduce the prepayment risks that arise from refinanced mortgages. Investors can reduce their risks by choosing different maturities to invest in.
6.
Treasury bonds are sometimes sold through auctions.
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True. When this happens, their interest rates may change from the original amounts.