Q298
In capital markets, instruments which are traded having maturity of more than one year is classified as
A.
contraction mortgages
B.
bonds and mortgages
AnswerC.
expansion bonds
D.
expansion mortgages
Answer: Option B
Solution
Answer: Option B
Solution:
In capital markets, instruments which are traded having maturity of more than one year is classified as bonds and mortgages. A mortgage bond is a bond secured by a mortgage or pool of mortgages. These bonds are typically backed by real estate holdings and real property such as equipment. In a default situation, mortgage bondholders have a claim to the underlying property and could sell it off to compensate for the default.