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Describe the different types of government securities shown in the box on page 601 under Uncle Sam and His Family. What are participation certificates?

SAM AND HIS FAMILY ment securities named Maes and Macs ca me goety and relatively high yields Mae-Government National Mortgage ,. Ginnieation (GNMA). Introduced the first mort (whose principal has been partially paid off) require an investment of as little as $10,000 AsOacked securities in 1970 and still dominates agke. The residential mortgage-backed 4. Sallie Mae-Student Loan Marketing Association, (SLM Corporation) Created to provide a national government-guaranteed student loans. Issues bonds, each backed by Sallie Mae as a whole rather than as specific pools of loans. Sallie Mae bonds are considered as safe as uries. Brokers sell bonds having minimum denom- inations of $10,000. You can also buy shares of by Congress in 1972 ties are packaged in pools and then resold as certificates ($25,000) or as shares total funds. Regular payments to investors investors e guar nnie Maes are backed by the full faith and anteed by the GNMA, an agency of the edit of the federal government. The average 2 n (FHLMC). Created by Congress in 1970 epartment of Housing and Urban Development Sallie Mae chartered but publicly owned, and its shares are traded on the New York Stock Exchange stock; the corporation is government life of mortgages is 12 years. Mac-Federal Home Loan Mortgage Cor- 5. Sonny Mae (SONYMA)-State of New York Mort agency issues mortgage-backed securities sim- to Ginnie Maes. The pools of fixed-rate home gage Agency. Issues bonds backed by fixed-rate single-family home mortgages and uses proceeds the to subsidize bel first-time home buyers. As with ordinary bonds, interest on Sonny Maes is paid only until the bonds mature. Sonny Maes are exempt from fed mortgages are made up of conventional hom loans rather than mortgages insured by the FHA or the VA. The timely payment of interest and the ultimate payment of principal are guaranteed 3. Fannie Mae-Federal National Mortgage Associa- tion (FNMA). Created in 1938, the agency issues mortgage-backed securities similar to Ginnie Ma and Freddie Macs. The pools of fixed-rate home mortgages are similar to Freddie Macs but not to Ginnie Maes. Like Ginnie Maes, Fannie Maes guar antee a fair share of interest and principal every month. Like Ginnie Maes and Freddie Macs, newly issued Fannie Mae certificates require a minimum eral income tax, and New York State residents do not pay state income tax on them 6. Nellie Mae-New England Education Loan Mar eting Corporation. A nonprofit corporation created by the Commonwealth of Massachusetts. Provides a secondary market for federally guar anteed student loans issued in Massachusetts and New Hampshire. It has been a wholly owned subsdiary of Sallie Mae since 1999. The AAA-rated Nellie Mae bonds mature in three years and are sold in minimum denominations of $5,000 investment of $25,000; the older certificates

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