The prepayment uncertainty associated with __________ makes the maturity of these securities uncertain.

Question

Quizplus · Accepted Answer

GNMA pass-through securities and other mortgage-related securities have prepayment uncertainty, meaning that the borrower can pay back the mortgage loan earlier than expected, which can lead to the maturity of the security being shorter or longer than anticipated. This uncertainty makes it difficult to accurately predict the cash flow and the maturity date of these securities.

The Prepayment Uncertainty Associated with __________ Makes the Maturity of These