Mortgage-backed securities are similar to ________ but the interest and principal payments are backed by the individual mortgages within the security.
A)bonds
B)stock
C)repurchase agreements
D)negotiable CDs

Question

Quizplus · Accepted Answer

Mortgage-backed securities are similar to bonds in that they represent debt obligations that are traded in financial markets. However, the cash flows from mortgage-backed securities are tied to the payments from individual mortgages that underlie the security, rather than to a single issuer.

Mortgage-Backed Securities Are Similar to ________ but the Interest and Principal