primary way that U.S., state and local governments borrow money to finance their capital investment and cash flow needs.
What is a Municipal Security?
100
Is the largest and most liquid financial market in the world.
Are treasury securities worldwide or small?
100
Debt instruments issued by federal credit agencies.
What is federal agency securities market?
100
A debt obligation like an IOU.
What is a corporate bond?
100
Represent ownership interest in mortgage loans.
What do mortgage securities represent?
200
debt obligations of states, their political subdivisions and certain agencies and authorities.
What is a municipal bond?
200
Bills,bonds,and notes.
What are the three different types of u.s. treasury securities?
200
The u.s. government.
What is the federal agency securities backed up by?
200
You are lending money to the company issuing the bond.
What is happening when you buy a corporate bond?
200
Created when mortgages are “pooled” or packaged by issuers/servicers for sale.
When are mortgage securities created?
300
Long term.
Are municipal bonds long term or short term investment?
300
Bonds:greater than ten years.
Notes:two to ten years.
Bills:less than one year.
What are the maturity of dates of bonds,notes,and bills?
300
Credit and default risk, and interest rates.
What are the risks of federal agency securities?
300
They are more risky than government bonds.
Are corporate bonds more or less risky than government bonds?
300
Majority of securities are issued by a U.S. government agency
Ginnie Mae
Fannie Mae
Freddie Mac
What are mortgage securities issued by?
400
States,cities,counties, and other governmental entities.
Who use's municipal securities/bonds?
400
You are lending money to the government.
What is happening when you are buying a u.s. treasury security?
400
Equity securities, debt securities, and derivative securities.
What are three different types of federal agency securities?
400
Corporate debt that mature in less than one year.
What is commercial paper?
400
Ensures liquidity for gov’t insured mortgages
Brings capital of investors into the market
Guaranteed by Federal Housing Administration
Does NOT issue, sell, or buy securities
What is Ginnie Mae?
500
Schools,streets,buildings,hospitals,parks, and etc.
What are municipal bonds used for?
500
Vulnerable to both inflation and changes in interest rate.
What is the risk of u.s. treasury bonds?
500
A month to 15 years.
What is the maturity date of a federal agency security?
500
The risk that a company will not make interest or principal payments timely and default on its bonds.
What is the risk of corporate bonds?
500
Federal home loan corporation known as Freddie mac.
Created in 1970, to expand the secondary market for mortgages in the U.S . Secondary mortgage market increases the supply of money available for mortgage lending and increase the money available for new home purchases.