Investors in NHA CMHC pass-through securities are exposed to the risk that the originating bank may fail, and the risk that the trustee may mismanage monthly interest and principal payments collected.

Question

Quizplus · Accepted Answer

Investors in NHA CMHC pass-through securities are not exposed to the risk of the originating bank failing or the trustee mismanaging payments, as these securities are backed by the Canadian Mortgage and Housing Corporation (CMHC), which guarantees timely payment of interest and principal.

Investors in NHA CMHC Pass-Through Securities Are Exposed to the Risk