What type of investment vehicle is issued by federal agencies, are not debt of the federal government, provide higher yields than the U.S. Treasury debt, and are extremely safe for investors?

Question

Quizplus · Accepted Answer

Mortgaged-backed securities are issued by federal agencies, but are not debt of the federal government, they provide higher yield than the U.S. Treasury debt. These securities are extremely safe for investors since they are backed by the federal government. However, this backing in most cases is only moral backing, which, in the case of default, the federal government is not obligated to support the debt. N Treasury debt is legally bound to assume any obligation contained in the debt's indenture.

What Type of Investment Vehicle Is Issued by Federal Agencies