Income Beginner: Introduction to Government Bonds

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1.
Series Electronic EE savings bonds are bought at one half their face value.
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False. They are bought at their full face amounts. Paper EE bonds were bought at one half their face value, but they are no longer offered.
2.
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.
3.
What is used for collateral for collateralized mortgage obligations?
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Pools of mortgages. These pools back CMOs in the event of default.
4.
How often do Treasury bonds pay interest?
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Semi-annually. They pay interest twice per year.
5.
Treasury note maturities can last as long as ________ years.
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Ten. Ten years is the maximum maturity.
6.
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.