MBSs and other securitized pools are referred as pass-throughs because
A) Cash flows from assets in the pool pass through to investors
B) Ownership of the assets passes through from the originator to the investor
C) Underlying loans can be prepaid at the discretion of the borrower
D) The underlying assets in the pool are amortized

Question

Quizplus · Accepted Answer

Cash flows from the assets in the pool, such as interest payments and principal repayments, are passed through to investors after deducting management fees and other costs. This is why MBSs and other securitized pools are referred to as pass-through securities.

MBSs and Other Securitized Pools Are Referred as Pass-Throughs Because