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Unformatted text preview: e D In Default 7/10 Stocks Ownership share of a corporation. share price = $605.56 # shares = 325,140,000 market value = $197 billion 8/10 Odds and Ends A. Secondary Markets B. Two Special Debt Instruments Where securities are traded after their initial sale. Why important? Marketable securities are more valuable. Aids the borrowing entities. 1. U.S. Treasury bonds Bonds used to fund national debt. Very low default risk. Used in monetary policy. 2. Home mortgages Loan contract for homebuyers. Like a bond. Typically mature in 30 years. Difficult to rate. 9/10 C. Securitization Creation of a financial asset (security) by combining other financial assets. Example: Mortgagebacked securities MBS $1 million M1 M2 M3 M4 M5 $200K $200K $200K $200K $200K 10/10...
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- Spring '12