Full Faith-and-Credit Obligation
A bond secured by an unconditional promise to pay by another entity. The term usually refers to a debt security backed by the United States government. For example, a U.S. Treasury security and a Ginnie Mae pass-through are both full faith-and-credit obligations. These securities carry very low risk.
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Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.