Abstract

Abstract We have discussed many types of fixed-income securities, such as Treasury securities and corporate bonds, in the previous chapters. This chapter mainly describes three other types: convertible bonds, mortgage-backed securities (pass-through), and collateralized mortgage obligations. Convertible bonds are corporate bonds that offer bondholders the option to convert their bonds to shares of the firm. Mortgage-backed securities are securitized portfolios of homeowners” mortgages. Collateralized mortgage obligations are structured securities backed by mortgage-backed securities and other collateralized mortgage obligations.

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