SIE practice questionmediumAgency Bonds
Which statement about the Government National Mortgage Association (GNMA) is correct?
- AGNMA securities cannot be purchased by individuals
- BGNMA is privately owned and operated
- CPayments are subject to default risk
- DInterest and principal payments are backed by the full faith and credit of the U.S.✓ Correct answer
Explanation
Why D — Interest and principal payments are backed by the full faith and credit of the U.S.
GNMA is a government agency; its securities are fully backed by the U.S. They are not privately owned, have minimal default risk, and individuals may invest.
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