Financial Industry Regulatory Authority (FINRA) Practice Exam 2025 - Free FINRA Practice Questions and Study Guide

The primary purpose of an issued mortgage bond is to raise capital secured by real estate. When a company or government entity issues mortgage bonds, they do so by using real estate holdings as collateral for the bond. This means that investors have a claim against the property should the issuer default on the bond payments. By securing the bond with tangible assets, the issuer can often attract more investors, as the security of the bond is enhanced by the underlying real estate. This type of financing is particularly advantageous for entities looking to fund large projects, developments, or other capital-intensive endeavors, as it leverages existing real estate value to generate the necessary capital.

The other options do not accurately represent the fundamental purpose of mortgage bonds. While providing immediate cash flow can be a benefit of issuing mortgage bonds, it is not the primary purpose. Protecting against interest rate fluctuations pertains more to hedging strategies rather than the goal of securing funds through a mortgage bond. Facilitating trading in municipal bonds is unrelated to the specifics of mortgage bonds, as municipal bonds are a distinct category of securities that fund local government projects and are not directly tied to mortgage financing.