Mortgage-back securities | Business & Finance homework help
However, there are still detractors who argue that the risks associated with investing in MBSs such as credit losses or prepayment penalties often outweigh any potential gains made. Furthermore, unlike corporate bonds where you have some level of transparency regarding financial health underlying company issuing them; when dealing with MBSs it is much harder determine true value behind these securities since information related borrowers used back mortgage portion is not always readily available thus making them somewhat less secure.
In terms of similarities between MBS and corporate bond trading both involve buying selling debt instruments order make profits whatever situation presents itself before them ultimately leading successful outcome when all said done. However main difference lies within type security being traded; while corporate bonds tend be issued single entity like corporation government agency Mortgage-backed securities pool multiple individual loans together thus creating larger asset class itself no matter what challenge may come about along way.