Point Counter-Point

Is the Trading of Mortgages Similar to the Trading of Corporate Bonds?

Point

Yes. In both cases, the issuers ability to repay the debt is based on income. Both types of debt securities are highly influenced by interest rate movements.

Counter-Point

No. The assessment of corporate bonds requires an analysis of the financial statements of the firms that issued the bonds. The assessment of mortgages requires an understanding of the structure of the mortgage market (MBS, CMOs, etc.).

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