Which of the following statements about U.S. Agency bonds are true?
I. They are backed by the "full faith and credit" of the U.S. government.
II. Their risk is almost as low as government notes and bonds.
III. Their yields are slightly higher than those of government securities.
IV. They are exempt from state and federal taxes.
A) I, II and IV only
B) I, III and IV only
C) II and III only
D) I and IV only

Question

Quizplus · Accepted Answer

II and III are correct. U.S. Agency bonds are not backed by the "full faith and credit" of the U.S. government, making statement I incorrect. They do, however, have a very low risk, similar to government notes and bonds, and typically offer slightly higher yields than government securities. While they are often exempt from state taxes, they are not exempt from federal taxes, making statement IV incorrect.

Which of the Following Statements About U