Mortgage-backed securities are securities that represent claims on the cash flows generated by a pool of mortgages.

Question

Quizplus · Accepted Answer

Mortgage-backed securities are indeed securities that represent claims on the cash flows generated by a pool of mortgages. These cash flows are generated from homeowners making mortgage payments, which are then distributed to holders of the securities in the form of interest and principal payments.

Mortgage-Backed Securities Are Securities That Represent Claims on the Cash