Unit 6, 7

Question 1

MBS

Answer 1

Mortgage-backed security

Question 2

PCs

Answer 2

mortgage participation certificates
p146
Principal and interest, once a month
Sold by FHLMC, Freddie Mac

Question 3

GMCs

Answer 3

guaranteed mortgage certificates
p146
Interest payment, twice a year
Principal payment, once a year
Sold by FHLMC, Freddie Mac

Question 4

TVA

Answer 4

Tennessee Valley Authority
p146
Public power provider
TVA bonds, often 50 year maturities

Question 5

Refunded

Answer 5

The government offers the investor a new security with a new interest rate and maturity date as an alternative to a cash payment for the maturing note

Question 6

NII

Answer 6

Net investment income

Question 7

RIC

Answer 7

Regulated investment company
Subject to tax only on the amount of NII the fund retains
Fun must distribute at least 90% to shareholders

Question 8

GSE

Answer 8

Government-sponsored enterprises
Corporations created by Congress to foster a public purpose, such as affordable housing

Question 9

CATS

Answer 9

Certificates of accrual on Treasury securities
A type of Treasury receipt

Question 10

TIGRS

Answer 10

Treasury income growth receipts
A type of Treasury receipt

Question 11

CDSC

Answer 11

Contingent deferred sales charge