Relative to treasury securities,agency securities have __________ liquidity and ___________ default risk.

Question

Quizplus · Accepted Answer

Agency securities have less liquidity and more default risk compared to treasury securities. This is because agency securities are issued by government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, which are not backed by the full faith and credit of the US government, unlike treasury securities. Moreover, the market for agency securities is smaller than that for treasury securities, making them less liquid.

Relative to Treasury Securities,agency Securities Have __________ Liquidity and ___________

Relative to Treasury Securities,agency Securities Have Liquidity and _