{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Money to use and they tend to make more risky

Info icon This preview shows pages 4–5. Sign up to view the full content.

View Full Document Right Arrow Icon
money to use and they tend to make more risky investment and making more profits. d. What is the difference between mortgage-backed securities and collateralized debt obligations? How did they contribute to the credit crisis? The MBS is backed by the mortgages, but the COD is a unregulated financial product, it is not any types of debt. COD is a product created by the financial institutes. It get every kinds of mortgages together, and the banks pay the rating agencies to rate them as a AAA rating, so the investors would by it. With the bad loans, predatory lending mixed up in the CDO, the falling of the housing prices and the default of the mortgages, all the house foreclosure happening making the COD a toxin assets, and making the investors pull out the investment, banks don’t lending money anymore and the lost of liquidity of the financial institutes make these institutes at the edge of failure, once the institutes
Image of page 4

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Econ 350 Winter 2012 Assignment 4 5 failed, the systemic risks come to reality, and ultimately lead to a financial crisis. 6. SERIES C BOND SALE Today you can bid on Series C bonds. They are similar to the last two, in that they will have a face value of $12 and mature in one year (one class). The Series C bonds pay $12 on January 16. A Dutch Auction will again be used to sell 100 bonds. As part of the problem set, please submit your desired bid price and the quantity of bonds you would like to purchase. You can use your ClassCash funds up until January 13, including your earnings from Series B bonds. $11.5 for 5 shares $11.5*5=$57.5
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern