StarlitFantasy
Tue Sep 17 2024
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6 answers
1065
How do you make money on a mortgage bond?
Could you please explain to me how one can make money on a mortgage bond? I understand that it's a type of security that represents a pool of mortgages, but I'm unsure about the mechanics of earning a profit from it. Do you earn interest payments from the underlying mortgages? Or is it through capital appreciation? Could you walk me through the process in a step-by-step manner, and highlight any potential risks or drawbacks that investors should be aware of?
