Income Beginner: Introduction to Government Bonds

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1.
Which of the following agencies does not issue mortgage-backed securities?
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The US Post Office. The others were created for mortgage purposes.
2.
Treasury note maturities can last as long as ________ years.
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Ten. Ten years is the maximum maturity.
3.
Treasury bond maturities can last as long as ________ years.
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Thirty. Thirty years is the maximum maturity.
4.
Why does the US government sell bonds?
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To fund its programs and meet its expenses. The US government often finds it useful to seek funds from the public.
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.