Future Business Leaders of America (FBLA) Securities and Investments Practice Test

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Study for the FBLA Securities and Investments Test. Enhance your financial expertise with well-crafted questions, hints, and detailed explanations. Get exam-ready today!

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What type of entity is FNMA?

Private corporation
Non-profit organization
Quasi-agency and public company
Federal agency only

The correct answer is: Quasi-agency and public company

FNMA, or the Federal National Mortgage Association, is classified as a quasi-agency and public company. This designation reflects its dual role in the financial sector. FNMA was created by Congress to provide liquidity, stability, and access to the mortgage market. As a government-sponsored enterprise (GSE), it operates under a public mission to enhance the flow of mortgage funds but also operates with characteristics of a private corporation, including the ability to operate with profit motives and access capital markets. This quasi-agency status means it has unique governmental relationships and benefits—such as the implicit backing of the federal government—while functioning in the private market. This combination allows FNMA to support the housing finance system while being subject to different regulations and financial dynamics than a traditional federal agency or a purely private corporation. Recognizing FNMA's status as a quasi-agency helps clarify its influence on the housing market and its operational strategies compared to other entities that do not combine public and private characteristics.