SIE practice questioneasyAgency Bonds
Which of the following is a government-sponsored enterprise, and its securities are NOT fully backed by the U.S. government?
- ATennessee Valley Authority (TVA)
- BGovernment National Mortgage Association (GNMA)
- CU.S. Treasury
- DFederal National Mortgage Association (FNMA)✓ Correct answer
Explanation
Why D — Federal National Mortgage Association (FNMA)
FNMA is a GSE and its securities carry an implicit, not explicit, government guarantee. GNMA securities are fully government-backed; Treasury securities are as well. TVA is a federal agency, but its bonds do not have the same backing as GNMAs.
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