Which bonds are issued by education, farming, and housing agencies?

• A. Government Bonds
• B. Government Agency Bonds
• C. Municipal Bonds
• D. Junk Bonds

Answer: (B)

Bonds issued by education, farming, and housing agencies are government agency bonds. The key idea is that the issuer—and not just the purpose of the funds—defines the category. When a bond is issued by a government-related agency (such as those focused on housing or farming programs), it falls into the government agency bond category. These differ from municipal bonds, which are issued by states or municipalities to fund local projects, and from junk bonds, which are issued by corporations with lower credit ratings. They are not direct Treasury securities, but they are linked to government-backed entities, often with some level of government support, which generally makes them relatively safer than many corporate issuers while delivering yields that reflect their specific backing.