Mortgage-backed securities are similar to bonds in that the investor who buys one receives
A) dividend payments.
B) federal insurance to cover the value of the security.
C) regular interest payments.
D) partial ownership of the company that issued the security.
C
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Refer to Figure 2-15. One segment of the circular flow diagram in the figure shows the flow of labor services from market K to economic agents J. What is market K and who are economic agents J?
A) K = product markets; J = firms B) K = factor markets; J = firms C) K = product markets; J = households D) K = factor markets; J = households
The greater the availability of close substitutes for a product, the greater the price elasticity of demand for that product
a. True b. False
You are thinking of buying a newly issued, 5-year bond that has a face value of $10,000 and offers no annual coupon payments. What is the most you should pay for this bond, if the interest rate is 5 percent (0.05) per year?
a. $5,000.00 b. $6,139.13 c. $7,835.26 d. $10,000.00 e. $43,294.77
Wilson is offered a job in Kansas City that pays $50,000 and a job in Dallas that pays $60,000 . Which pair of CPIs would ensure that the two salaries have the same purchasing power?
a. 80 in Kansas City and 100 in Dallas b. 125 in Kansas City and 150 in Dallas c. 100 in Kansas City and 124.5 in Dallas d. 100 in Kansas City and 140 in Dallas