1. Mortgage-backed securities are:
assets that were purchased based on the leveraged value of people's homes.
investments that people bought based on the equity of their homes.
None of these statements is true.
tradable assets made up of packages of individual mortgages.
2. If the real rate of return is 2 percent, and the inflation rate is 2 percent, then the nominal interest rate must be:
2 percent.
−4 percent.
−2 percent.
4 percent.