1. In the United States when the demand for mortgages outstripped the supply of money in the financial markets, creative methods such as the development of secondary markets and mortgage backed securities were developed. Discuss what effect these financing arrangements might have on the accountability of the borrower.
2. Assume that you are interested in a corporate bond that has a coupon of 5.00 percent and is currently selling for 102.5 percent of par. What is the current yield that you could expect on this bond?