T-Bills are issued in maturities of: _____ week, _____ week, ____ week, and ______week
4; 13; 26; 52
True or False: T-Bills are quoted on a dollar basis
False. Quoted on a discount yield basis
Interest on Federal Farm Credit system and FHLB securities are subject to which taxes
Federal only
What does ownership of a GNMA pass-through certificate represent
An undivided interest in a pool of residential mortgages
____________ is the mortgage-backed agency that is fully backed by the U.S. Government
GNMA
Is a CMO considered a derivative
Yes
Which tranche has the most predictable cash flow and maturity
Planned Amortization Class (PAC)
Which tranche has the most unpredictable cash flow and maturity
Support or Companion
The tranche that is the last to receive cash flow is the __________
Z tranche
What are T-STRIPS
Any T-Note/T-Bond where a broker-dealer has stripped the interest and principal payments to sell separately as zero-coupons
Since T-STRIPS are sold at a discount and mature at par, what must be done to their basis each year
The discount must be accreted each year
What system is used for the issuance of Treasury securities
An auction
True or False: The settlement date for T-Bills purchased at the auction is the next business day
False. Settlement at auction is the Thursday following the auction
_______________ following the trade date is settlement for trades of U.S. Government securities or option contracts
1 business day
How is interest on Treasuries treated for tax purposes
Federal only
Interest paid on bonds issued by U.S. territories or possessions is ___________
Triple-tax- exempt
What is a major advantage to investing in a bond issued by the Commonwealth of Puerto Rico
Triple-tax-exempt interest
What price do non-competitive bidders agree to pay at a Treasury auction
The lowest price (highest yield) of the accepted competitive bids
A competitive bid placed at a Treasury auction will indicate both _____________ and ______________
quantity; price
When must retail communication concerning CMOs be filed with FINRA
Within 10 business days of first use
Name two requirements that must be followed with CMO-related retail communication
May not be compared to other investments (like CDs), and edcational material must be offered
Which security has no connection to CMOs - GNMA, FNMA, FHLMC or SLMA
SLMA