What is mortgage-backed security

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1. A $1,000 par value bond matures in 7 years, pays interest semiannually, and has a yield-to-maturity of 5.4 percent. Each semiannual coupon payment is $60. What is the current market price? Round your answer to the nearest cent.

2. What is a mortgage-backed security? Be sure to explain the process of securitization.

3. If you are a risk manager who is risk averse, you will require a(n)

a. decrease in return, for a given increase in risk

b. increase in return, for a given increase in risk

c. increase in return, for a given decrease in risk

d. decrease in return, for a given decrease in risk

4. If you are a risk manager who is risk averse, you will require a(n)

a. decrease in return, for a given increase in risk

b. increase in return, for a given increase in risk

c. increase in return, for a given decrease in risk

d. decrease in return, for a given decrease in risk

Reference no: EM132006986

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