Recommendations

Question 1

Treasury Bill

Answer 1

A short-term government debt obligation. Typically sold at $1,000 during Treasury Department bids. The maturity time is at max 1 year.

Question 2

Ginnie Mae Pass Through Certificate

Answer 2

Fixed-income securities that represent an undivided interest in a pool of federally insured mortgages put together by a government sponsored agency such as GNMA. (Government National Mortgage Association)

Question 3

Treasury STRIP

Answer 3

Separate Trading of Registered Interest Principal of Securities. Used for a known payment at a certain date. These are zero coupon- meaning you don’t receive a payment until the full maturity. Interest earned on STRIPS must be reported in the year in which it’s earned.

Question 4

Bankers’ Acceptance

Answer 4

Used by companies as a form or relatively safe payment. It’s a sort of “post-dated check”.

Question 5

Warrants

Answer 5

Gives the holder the right to purchase the underlying stock at a specific price and a specific date.