Unit 7: Treasury and Gov't Agency Debt Flashcards
1
Q
Government Agency Securities
A
No credit risk
Ginnie Mae
2
Q
Government Sponsered Enterprises
A
Credit risk, but implied guarantee
Fannie and Freddie
3
Q
T-Bills
A
Maturities: 4, 13, 26, 52 weeks
Issued at discount
Bid > Ask
4
Q
T Notes
A
2-10 years
issued at par
Bid < Ask
% of Par in 1/32%
EX: 98.01 = 98 1/32% = $980.3125
5
Q
T Bonds
A
30 years
issued at par
Bid < Ask
% of Par in 1/32%
EX: 98.01 = 98 1/32% = $980.3125
6
Q
MBS interest payments taxable?
A
Yes, at all levels
7
Q
Interest rates rise, MBS face the risk of…
A
Extension
8
Q
Interest rates fall, MBS face the risk of…
A
Prepayment
