What type of assets are mortgage-backed bonds?

Mortgage-backed bonds are indeed assets securitized by pools of mortgages. In this financial structure, numerous mortgage loans are bundled together into a pool, and securities are issued against that pool. Investors receive regular payments derived from the mortgage repayments made by the borrowers within the pool. This means that the bonds provide a way for investors to gain exposure to real estate income without directly owning physical properties.

The significance of this asset class lies in its ability to spread risk across many different mortgages and facilitate liquidity in the mortgage market. While they can offer relatively stable cash flows, the performance of mortgage-backed bonds is closely tied to the health of the underlying mortgage loans and the real estate market overall.

The other types of assets mentioned, such as stocks, corporate bonds, real estate properties, and cash equivalents, do not conform to the specific structure of mortgage-backed securities, which are defined by their basis in a pool of mortgage loans, thereby making the first option the only accurate description of mortgage-backed bonds.