Government Bonds
Which type of bond is backed by the full faith and credit of the U.S. government?
Treasuries = safest. Full faith and credit = government will pay.
Complete Analysis & Legal Rationale
Treasury securities (T-bills, T-notes, T-bonds) are backed by the full faith and credit of the U.S. government, making them the safest fixed-income investments.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Corporate bonds are backed only by the issuing corporation, not the government.
Municipal bonds are backed by state/local governments, not the federal government.
Matches the verified teaching point in the explanation.
Agency bonds (like Fannie Mae) have implied but not explicit government backing.
Official Standard: Primary reference for Treasury bills/notes/bonds/STRIPS characteristics (verify current Treasury materials).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.