Advantages of agency bonds include
A) a slightly higher rate of return than Treasury securities and an implicit guarantee by the U.S. government.
B) protection from prepayment risk.
C) interest is exempt from federal taxation.
D) All of the above.

Question

Quizplus · Accepted Answer

Agency bonds typically offer a slightly higher rate of return than Treasury securities due to their slightly higher risk, and they often carry an implicit (though not explicit) guarantee by the U.S. government. However, they do not generally offer protection from prepayment risk, nor is their interest exempt from federal taxation.

Advantages of Agency Bonds Include