Final answer:
US Agency bonds often carry a very low risk and offer slightly higher yields compared to US Treasury securities, making them an attractive investment. While some are backed by the US government, not all agency bonds have this guarantee. Interest on these bonds is exempt from state and local taxes but not from federal taxes.
Step-by-step explanation:
US Agency bonds, also known as US Treasury notes, are a form of debt issued by US government agencies. They are not backed by the full faith and credit of the US government, so statement I is false. However, statement II is true: agency bonds have a low risk similar to government notes and bonds. Statement III is also true: agency bonds typically offer slightly higher yields than government securities due to their slightly higher risk. Lastly, statement IV is false: agency bonds are subject to federal taxes, but some may be exempt from state or local taxes depending on the specific bond.