Question

Which of the following statements regarding Government National Mortgage Association (GNMA) securities are true EXCEPT:________. A) investors own an undivided interest in a pool of mortgages B) GNMAs are considered to be the riskiest of the agency issues C) the minimum initial investment is $25,000 D) investors receive a monthly check representing both interest and a return of principal

Answer 1

Answer: B) GNMAs are considered to be the riskiest of the agency issues

Explanation:

The Government National Mortgage Association (GNMA) or Ginnie Mae as they are popularly known, are a Federal agency that guarantee the payment of interest and principal on securities by lenders that are approved by the Agency.

As a result, these securities are backed, like Treasury Bills, by the full faith and credit of the United States Government which means that they are the safest of Agency issues.