How can MBS have more yield than the individuals it contains?

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I am watching the Big Short and the opening scene is that banker talking about individual mortgages being low yield and boring. Then he goes on to say their yield is higher when bundled to an MBS.

How could that be possible?

If I combine two debts with 1% interest, wouldn’t the combined interest be 1% again?

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Anonymous 0 Comments

Your submission has been removed because questions about the film The Big Short have been asked many times in the past. [Please see this search](/r/explainlikeimfive/search?q=the%20big%20short&restrict_sr=1) which lists all of the times it has previously been asked in ELI5.

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