Freddie Mac 2009 Annual Report Download - page 334

Warrant — Refers to the warrant we issued to Treasury on September 8, 2008 as part of the Purchase Agreement. The
warrant provides Treasury the ability to purchase shares of our common stock equal to 79.9% of the total number of shares
of Freddie Mac common stock outstanding on a fully diluted basis on the date of exercise.
Yield curve — A graphical display of the relationship between yields and maturity dates for bonds of the same credit
quality. The slope of the yield curve is an important factor in determining the level of net interest yield on a new mortgage
asset, both initially and over time. For example, if a mortgage asset is purchased when the yield curve is inverted, with
short-term rates higher than long-term rates, our net interest yield on the asset will tend to be lower initially and then
increase over time. Likewise, if a mortgage asset is purchased when the yield curve is steep, with short-term rates lower than
long-term rates, our net interest yield on the asset will tend to be higher initially and then decrease over time.
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