Investors in mortgage-backed pass-through securities are exposed to a variety of risks.Compared to other fixed-income securities, the most unique of these risks is

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Mortgage-backed pass-through securities are backed by a pool of mortgages, and therefore prepayment risk is the most unique risk associated with them. This risk occurs when borrowers pay off their mortgages early, which can negatively impact the returns of investors in these securities.

Investors in Mortgage-Backed Pass-Through Securities Are Exposed to a Variety