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You Own a Mortgage Passthrough

Question 21

Multiple Choice

You own a mortgage passthrough. Which one of the following statements correctly describes the payments you will receive on that security?


A) The payments will decrease at a constant rate over the life of the security.
B) The payments will increase at a decreasing rate over the life of the security.
C) The payments will be fixed for the life of the security.
D) The payments will vary depending upon the amount paid on the underlying mortgages each period.
E) The payments will decrease based on the interest shown on the amortization schedule.

Correct Answer:

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