Final answer:
Mortgage-backed securities are generally traded according to their average life rather than their stated maturity dates. Corporate bonds, government bonds, and rate securities are typically traded based on their stated maturity dates.
Step-by-step explanation:
Among the investments listed, mortgage-backed securities are generally traded according to their average life rather than their stated maturity dates.
Mortgage-backed securities are bonds that are backed by a pool of mortgage loans. When homeowners make their monthly mortgage payments, the interest and principal payments are passed through to the holders of these securities. As a result, the average life of mortgage-backed securities is dependent on how quickly homeowners pay off their mortgage loans, rather than the stated maturity dates of the individual loans. This makes the trading of mortgage-backed securities more closely tied to the average life and prepayment risks.
On the other hand, corporate bonds, government bonds, and rate securities are usually traded based on their stated maturity dates. Corporate bonds are issued by corporations to raise capital, and their interest payments are fixed until maturity. Government bonds are issued by the government and typically have a fixed interest rate and maturity date. Rate securities, such as Treasury bills, are short-term debt instruments with fixed maturity dates and interest rates.