Homework answers / question archive / 1) Explain why mortgage investors demand a higher yield for investing in securities with call risk and extension risk

1) Explain why mortgage investors demand a higher yield for investing in securities with call risk and extension risk

Business

Share With

1) Explain why mortgage investors demand a higher yield for investing in securities with call risk and extension risk. Why would a mortgage investor view mortgage prepayments negatively?

2. Why was the development of mortgage insurance necessary before secondary mortgage markets could develop?

3. How has the development of secondary mortgage markets allowed mortgage issuers to attract additional funds from the capital markets?

4. What contrasts/differences are there between the secondary market activity for mortgages & other capital markets like bonds and stocks for example and why should the secondary markets for mortgages be split up/segmented from the secondary markets for bonds?