CGFO TREASURY
MANAGEMENT
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
Investment Types - ANS-U.S. Treasury notes and bonds
Federal agency securities
Federal instrumentalities
Investment pools
Repurchase agreements
Derivatives
Securities lending agreements
Other securities
U.S. Treasury Bills - ANS-Backed by full faith and credit of the U.S. Government
Credit & default risk free
Highly liquid
Lowest rate of return (normally)
Matures in one year or less
Sold and matures on Thursdays
Issued at discount, interest paid at maturity
Discount - ANS-Term x discount % / 360
, Selling price - ANS-$100 minus discount
Yield - ANS-Earnings / price
Bond equivalent yield - ANS-Discount / dollar price x 365 / term
U.S. Treasury Notes and Bonds - ANS-Backed by full faith and credit of the U.S.
Government
Credit & default risk free
Highly liquid
Slightly higher interest rate of return than T-Bills (normally)
Coupon bearing
Interest paid semi-annually
Matures from 2-30 years
Federal Agencies - ANS-Instruments backed by full faith and credit of U.S. Government
Generally higher interest rates than comparable treasuries
Subject to liquidity and market risks
Examples: Small Business Administration; Export-Import Bank; Government National
Mortgage Association
Federal Instrumentalities - ANS-Government sponsored enterprise
Established to implement federal lending programs
Carries and implied backing of the federal government
Backed by full faith and credit of the issuing agency
Generally higher interest rates than comparable treasuries
Short and long-term instrument
Examples: Federal farm credit banks; federal home loan banks; federal home loan
mortgage corporation; federal nation mortgage corporation
MANAGEMENT
QUESTIONS AND
CORRECT ANSWERS
GRADED A+ 2025-2026
Investment Types - ANS-U.S. Treasury notes and bonds
Federal agency securities
Federal instrumentalities
Investment pools
Repurchase agreements
Derivatives
Securities lending agreements
Other securities
U.S. Treasury Bills - ANS-Backed by full faith and credit of the U.S. Government
Credit & default risk free
Highly liquid
Lowest rate of return (normally)
Matures in one year or less
Sold and matures on Thursdays
Issued at discount, interest paid at maturity
Discount - ANS-Term x discount % / 360
, Selling price - ANS-$100 minus discount
Yield - ANS-Earnings / price
Bond equivalent yield - ANS-Discount / dollar price x 365 / term
U.S. Treasury Notes and Bonds - ANS-Backed by full faith and credit of the U.S.
Government
Credit & default risk free
Highly liquid
Slightly higher interest rate of return than T-Bills (normally)
Coupon bearing
Interest paid semi-annually
Matures from 2-30 years
Federal Agencies - ANS-Instruments backed by full faith and credit of U.S. Government
Generally higher interest rates than comparable treasuries
Subject to liquidity and market risks
Examples: Small Business Administration; Export-Import Bank; Government National
Mortgage Association
Federal Instrumentalities - ANS-Government sponsored enterprise
Established to implement federal lending programs
Carries and implied backing of the federal government
Backed by full faith and credit of the issuing agency
Generally higher interest rates than comparable treasuries
Short and long-term instrument
Examples: Federal farm credit banks; federal home loan banks; federal home loan
mortgage corporation; federal nation mortgage corporation
