Before the integration of the mortgage market into the larger capital market,rates on residential mortgages relative to bonds were:

Question

Quizplus · Accepted Answer

Before the integration of the mortgage market into the larger capital market, rates on residential mortgages relative to bonds were relatively higher. This was because residential mortgages were considered riskier and less liquid than bonds, leading to the need for higher yields to compensate investors for the increased risk. Integration into the larger capital market has led to increased liquidity and standardization, reducing the risk and driving down relative yields on residential mortgages.

Before the Integration of the Mortgage Market into the Larger