26-22 GNMA pass-throughs can assist an FI in resolving duration mismatch and illiquidity risk problems.

Question

Quizplus · Accepted Answer

GNMA pass-throughs, backed by the Government National Mortgage Association, can offer a way for financial institutions to match the duration of their assets and liabilities, reducing duration mismatch risk. Additionally, they are highly liquid and can help mitigate the illiquidity risk that FIs may face. Therefore, statement 26-22 is true.

26-22 GNMA Pass-Throughs Can Assist an FI in Resolving Duration