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Mortgage-Backed Securities

Question 25

Multiple Choice

Mortgage-backed securities


A) are low risk financial instruments, as their market value is based on long-term mortgages
B) were only marketed in the U.S. and could not be sold to financial institutions abroad
C) are fairly risk-free as the financial institutions that buy and sell them understand how to spread the risk that is involved
D) are a form of derivatives, that is, securities whose value is based on the value of other financial instruments
E) none of the above

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