Government-Sponsored Enterprises Like Fannie Mae and Freddie Mac Usually Borrow

question 45

Multiple Choice

Government-sponsored enterprises like Fannie Mae and Freddie Mac usually borrow at interest rates:

• A) below what private lenders pay.
• B) exceeding what private lenders pay.
• C) that are the same as private lenders since they are really a private lender.
• D) that are slightly below the federal funds rate.

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Definitions:

Revenues

The income generated from normal business operations, calculated by multiplying the price of goods or services by the quantity sold.

Dividends Payable

A liability account in a company's balance sheet indicating the amount in dividends that the company owes to its shareholders but has not yet paid out.

Operating Expenses

Expenses incurred from a company's operational activities, excluding the cost of goods sold, taxes, and interest expenses.

Dividends Declared

Profits that a company's board of directors has decided to distribute to shareholders in the form of dividends.