Agency Debt Securities

Question 1

Ginnie Mae

Answer 1

Government National Mortgage Association (GNMA)
Gov. owned, supports department of housing and urban development, sells MBS, pays higher yields,
interest taxable at all levels, min. $1,000, monthly interest and principal, pass through certificates, reinvestment risk

Question 2

Farm Credit System

Answer 2

FCS. provides agricultural financing and credit. Privately-owned, gov. sponsored

Question 3

Freddie Mac

Answer 3

Federal Home Loan Mortgage Corporation (FHLMC), public, promotes secondary market for mortgages by packaging as MBS. taxable all levels, backed by itself

Question 4

Mortgage Participation Certificates

Answer 4

PCs, make pricipal interest payments once a month. Type of pass-through issud by Freddie Mac

Question 5

Guaranteed Mortgage Certificates

Answer 5

GMCs, make principal payments once a year and interest twice a year. Pass-through issued by freddie mac

Question 6

Fannie Mae

Answer 6

Federal National Mortgage Association (FNMA), public, purchases conventional and insured mortgages from FHA and VA, backed not by gov but by it. Interest semiannually, tax at all levels

Question 7

Sallie Mae

Answer 7

Student Loan Marketing Association, issues discount notes and short-term floating rate notes, only taxed federally

Question 8

Competitive Bids

Answer 8

Bids placed by primary dealers (BoA, HSBC) on treasury securities

Question 9

Noncompetitive Bids

Answer 9

Bids placed by smaller institutions such as individuals or smaller banks. Always fulfilled but the lowest accepted competitive bid