A pass-through is
A)an indirect ownership in a portfolio of mortgage loans with similar interest rate.
B)an indirect ownership in a portfolio of mortgage loans with similar maturity.
C)a direct ownership in a portfolio of mortgage loans which share similar maturity, interest rate and quality characteristics.
D)a direct ownership in a portfolio of mortgage loans backed by government.
E)a direct ownership in a portfolio of commercial loans originated by well- capitalized financial intermediaries.

Question

Quizplus · Accepted Answer

A pass-through security represents a direct ownership in a portfolio of mortgage loans that share similar maturity, interest rate, and quality characteristics. This allows investors to receive direct payments from the underlying mortgages, including interest and principal repayments.

A Pass-Through Is