Asked by Mikayla Pearson on May 05, 2024
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Mortgage pass-through securities are relatively safe,even when loans are made to borrowers with poor credit ratings.
Mortgage Pass-through Securities
Financial instruments that pool together home mortgage loans and allow investors to receive payments based on the underlying mortgages' interest and principal repayments.
Poor Credit Ratings
Indicates a low assessment of creditworthiness, suggesting that the individual or entity is a higher risk to lenders.
Relatively Safe
This term refers to something considered to be safe within a certain context or comparison but not absolutely risk-free.
- Understand the safety levels of mortgage pass-through securities.
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Learning Objectives
- Understand the safety levels of mortgage pass-through securities.
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