Typically, Debentures Have Higher Interest Rates Than Mortgage Bonds Primarily

question 72

True/False

Typically, debentures have higher interest rates than mortgage bonds primarily because the mortgage bonds are backed by assets while debentures are unsecured.

---

Definitions:

Net Capital

The difference between a company's or country's total assets and its total liabilities, indicating the net value of its capital resources.

Loanable Funds

The market where savers supply funds for loans to borrowers, influenced by the interest rate.

Tax Rebate

A financial refund provided by the government to taxpayers, typically to stimulate the economy or encourage certain behaviors.

Open-Economy Macroeconomic Model

A framework for understanding and analyzing the interactions between a country's economy and the rest of the world, including trade and capital flows.