Question

PLEASE HELP!!

A home mortgage company backed by the government wants to raise money for more first -time home mortgage loans. Which type of bond would the government sponsored agency issue? Why?
1. Corporate
2. Municipal
3. Agency
4. US treasury

Answer 1

3. Agency bond

Step-by-step explanation:

Agency bonds, also referred to as agency debt, is the bond issued by a government-sponsored enterprise or one of the federal departments. The US treasury as a department does not sponsor agency bonds because it issues bonds.

Agency bonds have a slightly higher interest rate than Treasury bonds. A home mortgage company backed by the government will issue agency bonds. The home mortgage company has the backing( sponsorship) of a government agency or department.