CFA Practice Question

CFA Practice Question

Which of the following is most likely incorrect?
A. Mortgage bonds are usually backed by land, property, plant and equipment.
B. If the issuer defaults, then mortgage bondholders can sell the underlying property as compensation.
C. Debenture bonds are likely to have lower yields compared to mortgage bonds issued by the same firm.
Explanation: A mortgage bond is secured by a mortgage on one or more assets, whereas a debenture bond is not. So the yield will be higher for a debenture bond.

User Contributed Comments 0

You need to log in first to add your comment.