U.S. Government Debt Products

Question 1

A T-Bill is

Answer 1

Issued at discount. Maturities of 4, 13, 26, and 52 weeks. Quoted on discount yield basis. Ask is lower than bid.

Question 2

A T-Note is

Answer 2

Non-callable. Matures between 2 - 10 years. Pays interest semi annually.

Question 3

A T-Bond is

Answer 3

Matures greater than 10 years (Currently 30 years). Might be callable. Pays interest semi annually.

Question 4

TIPS are

Answer 4

Treasury Inflation Protection Securities. Protect against purchasing power risk. Maturities are 5, 10, and 30 years. Pays interest semi-annually. Coupon is fixed and the par amount is adjustable based on the consumer price index. Rises with inflation and vice versa.

Question 5

Zero Coupon Bonds are

Answer 5

Either treasury receipts or treasury strips.

Question 6

A treasury reciept is

Answer 6

Created by a financial institution using U.S. treasury notes and bonds. Not backed by the U.S. Government.

Question 7

A treasury strip is

Answer 7

Created by a U.S. Government securities dealer. Has no coupon. Backed by U.S. Government.

Question 8

A U.S. Government savings bond is

Answer 8

Non-negotiable. Includes series EE bonds and series I bonds.

Question 9

A GNMA bond is

Answer 9

Directly backed by the U.S.Government. Takes federally insured mortgages only.

Question 10

A FNMA bond is

Answer 10

Implicitly backed by the U.S. Government. Mix of federal and conventional mortgages.

Question 11

A FHLMC bond is

Answer 11

Implicitly backed by the U.S. Government. Conventional mortgages only.