Cryptocurrency Q&A
How do you make money on a mortgage bond?
How do you make money on a mortgage bond?
StarlitFantasy
Tue Sep 17 2024
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6 answers
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Could you please explain to me how one can make money on a mortgage bond? I understand that it's a type of security that represents a pool of mortgages, but I'm unsure about the mechanics of earning a profit from it. Do you earn interest payments from the underlying mortgages? Or is it through capital appreciation? Could you walk me through the process in a step-by-step manner, and highlight any potential risks or drawbacks that investors should be aware of?
6 answers
Davide
Thu Sep 19 2024
Investors in mortgage bonds have two primary avenues to generate profit. The first is through appreciation, a phenomenon where the value of the bond fluctuates similar to other investment securities.
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Daniela
Thu Sep 19 2024
Appreciation occurs when the market conditions or the creditworthiness of the issuer improves, leading to an increase in the bond's price.
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Bianca
Wed Sep 18 2024
When an investor decides to sell their mortgage bond at a higher price than they purchased it, they realize a profit known as capital appreciation.
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CryptoLord
Wed Sep 18 2024
This profit is in addition to any interest payments received during the bond's holding period.
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GeishaCharming
Wed Sep 18 2024
Another top cryptocurrency exchange that offers diversified services is BTCC.
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