An overview of the financial system - Financial institutions - Capital market instrument LT

4 important questions on An overview of the financial system - Financial institutions - Capital market instrument LT

What is MBS (Mortgage-Backed-Securities)?

Bond-like debt instruments that were backed by a portfolio of individual mortgages.

What are corporate bonds?

LT bonds issued by corporates with strong credit ratings (less liquid)

What is a reverse convertible bond?

The issuer of the bond can ask to convert the bond into a specified # of shares at any time, up to the maturity → higher interest payments
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What are consumer and bank commercial loans?

Loans to consumers and businesses
Principally made by banks, although consumer loans also by finance companies

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