Which of the Following Statements Concerning Agency Bonds Are Correct

question 63

Multiple Choice

Which of the following statements concerning agency bonds are correct?
I.Agency issues are normally noncallable or carry lengthy call deferment features.
II.Agency issues usually provide yields that are somewhat below the market yields for Treasuries.
III.All agency issues are backed by the full faith and credit of the U.S.government.
IV.New agency bonds are all issued in book entry form.

• A) I and III only
• B) I and IV only
• C) II, III and IV only
• D) I, II and III only

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Definitions:

Negotiable

Capable of being discussed and modified in a transaction or exchange, often referring to the terms of agreements or financial instruments that can be transferred or sold.

Certificates of Deposit

Certificates of Deposit (CDs) are financial products offered by banks that provide a fixed interest rate in exchange for keeping a deposit untouched for a predefined period.

Maturity Date

The specific date on which the principal amount of a bond, loan, or other financial instrument is to be paid back in full to the investor.

Tax Bracket

A range of income taxed at a specific rate by the government, part of a progressive tax system.