Question: (1) Despite the criticism against mortgage-backed securities, MBSs provide real benefits to the mortgage market and to investors. Discuss its role in the growth of the mortgage market, and in portfolio management as a potential diversification tool.
(2) Discuss the rationale and main criticisms of short-selling restrictions.
(3) Give a few examples of psychological factors or behavioral biases that could affect investment behavior. Provide details on how they affect investment behavior.
(4) How have actively managed funds performed relative to passive funds? Discuss the values provided to investors of active funds. Do fund manager quality and risk appetite affect fund performance?