Explain What a Mortgage-Backed Security (MBS)is and How It Functions

question 1

Essay

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

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Definitions:

Absorption

The process by which one substance takes up or makes part of itself another substance.

Nutrient Molecules

The basic components of food that are necessary for growth, metabolism, and the body's functions, such as proteins, vitamins, and minerals.

Blood Clot

A semi-solid mass of blood that forms when blood components, such as platelets and fibrin, aggregate to stop bleeding from injured vessels, a key component of the hemostatic process.

Vitamin

Organic compounds that are essential in small amounts for the body to function properly, often obtained through diet.