You have the opportunity to invest in mortgage backed


You have the opportunity to invest in Mortgage Backed Securities (MBS). MBS are bonds whose cash flows are linked to mortgage payments by homeowners. These MBS are offering a yield of 20% per year. They have been assigned a rating of AAA by ratings agencies, the highest possible rating, and the same as the historical rating of U.S. government debt.

Do you make this investment? Explain your reasoning.

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Financial Management: You have the opportunity to invest in mortgage backed
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