As compared to unsecured bonds, mortgage bonds are considered as

Solution (By Examveda Team)

As compared to unsecured bonds, mortgage bonds are considered as less risky. Unsecured bonds or debentures are bonds that are not backed by some type of collateral. In other words, the bond is only secured by the bond issuer's good credit standing. There are no building, equipment, vehicles, or other assets backing up the bond. A mortgage bond is a bond secured by a mortgage or pool of mortgages. These bonds are typically backed by real estate holdings and real property such as equipment. In a default situation, mortgage bondholders have a claim to the underlying property and could sell it off to compensate for the default.