If Mortgage Interest Rates Fall and Prepayments Occur,the Holder of a GNMA

If mortgage interest rates fall and prepayments occur,the holder of a GNMA pass-through selling at a _____ will have a _____. I. discount; capital gain
II. premium; capital loss
III. discount; capital loss
IV. premium; capital gain

A) I only
B) I and III only
C) I and II only
D) II and IV only
E) III and IV only