In this homework, you will find a lot of guided reading questions. That is because this section of the course, Module 3, is focused on providing students background information related to various markets, including Money Markets, Bonds, Mortgages, Stock Markets, Foreign Exchange and Derivatives markets. Do spend some time reading through Chapters 5, 6, 7, and 8 as they are a more important and significant component of this module. Chapters 9 and 10 (Derivatives and Foreign Exchange) will be covered just briefly to give a general overview. In all of the chapters focus on grasping an understanding of the instruments in each market and the participants in each market as that is what matters most.

Question 5, Chapter 7, Mortgage Markets, Guided Reading, pgs. 209 - 233 First read through Chapter 7s Mortgage Markets (pgs. 209 - 233), focus on the key terms, especially the bold terms. Explain the differences in the securities of the primary mortgage market (mortgages, jumbo mortgages, sub-prime, and alt-As, etc.), and the secondary mortgage market (mortgage backed securities, MBSs). Be sure to explain why mortgages are sold in the secondary market as this is the a key point.