Question: 1) Explain the difference between a bid price and an asked price and also explain why the prices are different. 2) Explain what a mortgage-backed

1) Explain the difference between a bid price and an asked price and also explain why the prices are different.

2) Explain what a mortgage-backed security (MBS) is and how it functions. Also, explain why these securities were such a problem during 2008.

3) What is the meaning of a pure discount or zero coupon debt instrument?

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