Income Beginner: Introduction to Government Bonds

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1.
Treasury bonds are sometimes sold through auctions.
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True. When this happens, their interest rates may change from the original amounts.
2.
Government bonds can mature in as many as _______ years.
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Fifty. Government bonds can actually last fifty years.
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.
Treasury note maturities can last as long as ________ years.
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Ten. Ten years is the maximum maturity.
5.
________ 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.
6.
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.