Chapter 10 Flashcards
T-Bills are issued in maturities of: ____ week, ____ week, ____ week, and ____ week
T-Bills are issued in maturities of: 4 week, 13 week, 26 week, and 52 week
The minimum face value of a T-Bill, T-Note or T-Bond is $______.
$100
True or False: T-Bills are quoted on a dollar basis.
False. T-Bills are quoted on a discount yield basis.
The following would be a quote for what security? Bid 4.26 Asked 4.22
T-Bill
What is the maturity range of a T-Note?
2 to 10 years
What is the maturity range of a T-Bond?
more than 10 years
Corporate and municipal bonds are quoted in 8ths, while T-Notes and T-Bonds are quoted in ______.
32nds
Though subject to federal tax, interest on Treasuries is exempt from ________ and ________ tax.
state and local tax
Interest on Federal Farm Credit system and FHLB securities is subject to which taxes?
Federal only, and exempt from state and local
True or False: Interest paid on GNMA, FNMA, FHLMC, and SLMA agency bonds is fully taxable to investors.
True,taxed at federal, state and local levels
What does ownership of a GNMA pass-through certificate represent?
An undivided interest in a pool of residential mortgages
How often do GNMA pass-throughs make payments?
monthly
Each payment from GNMA will represent both ____________ and ____________.
Principal and Interest
______ is the mortgage-backed agency that is fully backed by the U.S. Government.
GNMA
What risk is primarily associated with mortgage-backed securities?
Prepayment risk. Mortgages get pre-paid through selling or re-financing, don’t collect all of the interest