An article in the New York Times discussing mortgage-backed bonds observed: When demand for the bonds rises,
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An article in the New York Times discussing mortgage-backed bonds observed: “When demand for the bonds rises, which translates into lower interest rates on them, banks can offer homeowners lower interest rates on their underlying mortgages.” Shouldn’t increased demand for mortgage-backed bonds increase the interest rates on the bonds rather than lower them?
Briefly explain.
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Money Banking And The Financial System International Edition
ISBN: 978-1292000183
2nd Edition
Authors: R. Glenn Hubbard ,Anthony P Obrien
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