The total interest collected from the pool will be ________ if prepayment accelerates; therefore,the dollar spread between interest inflow and outflow becomes ________.

Question

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If prepayment accelerates, the total interest collected from the pool will be lower because borrowers are paying off their loans earlier than expected, reducing the amount of interest that can be collected. As a result, the dollar spread between interest inflow and outflow becomes smaller because there is less interest to be earned from the loans.

The Total Interest Collected from the Pool Will Be ________