Types of Bonds and CDs

Question 1

Treasury Bonds

Answer 1

T-Bills, T-Notes, T-Bonds

Question 2

Agency Bonds

Answer 2

Very similar to treasury bonds, but they are issued by government agencies like Fannie Mae or Freddie Mac or Sallie Mae. They aren’t backed by the US government

Question 3

US Treasury

Answer 3

Department responsible for paying government bills and raising money to execute jobs for the government. This is done through taxes and through bonds.

Question 4

CD

Answer 4

Certificates of deposits. Usually issued through banks.

Question 5

Brokered CDs

Answer 5

CDs issued through brokerage firms. They are more diversified.

Question 6

inflation risk

Answer 6

risk that inflation out paces the growth of the CD.

Question 7

Benefits of Muni-bonds

Answer 7

They are state and federally tax exempt

Question 8

TIPS

Answer 8

Treasury inflation protected securities; protected from inflation; back US government; only taxed on the federal level.