Fixed Income Securities: Rapid Fire

What this video covers

• Why agencies are fully taxable at all levels even though students constantly confuse them with state-exempt Treasuries
• How to distinguish Government National Mortgage Association (GNMA, or Ginnie Mae) as the only agency backed by the full faith and credit of the U.S. government from Fannie Mae and Freddie Mac with their implied moral obligation
• What phantom income means for zero-coupon bonds, STRIPS, and Treasury Inflation-Protected Securities (TIPS), and why Avery the advisor parks them in tax-deferred accounts
• How mortgage-backed securities (MBS) pass-throughs pay monthly (not semiannually) and why prepayment risk and extension risk move in opposite directions on the interest-rate seesaw
• The exact corporate-bond liquidation ladder: secured debt, senior debentures, subordinated debt, preferred stock, then common equity, and why even a junior subordinated debenture beats senior preferred stock
• The municipal bond split between general obligation (GO) bonds (full faith, credit, and ad valorem property taxes, voter approval usually required) and revenue bonds (project-backed, no vote needed)
• Why municipal interest is federally tax-exempt but municipal capital gains are fully taxable, and how industrial development revenue bonds (IDRBs) may trigger Alternative Minimum Tax (AMT)