Which one of the following is correct concerning the total payment amount on a PO strip?
A) The total payment amount equals the bond's par value.
B) The total payment amount will either equal or exceed the bond's par value.
C) The total payment will vary based on the PSA schedule.
D) The total payment amount will increase if interest rates decline.
E) The total payment amount will vary if the prepayment rate varies.
Correct Answer:
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