For mortgage securities:
A) a change in the market rate of interest affects the rate used to discount the cash flows
B) a change in the market rate of interest affects the time patterns of the cash flows
C) the amount and timing of the cash flows are contingent upon the interest rates
D) a. and b. only
E) a, b, and c
Correct Answer:
Verified
Q13: 11-19.The CPR of passthroughs refers to:
A) coupon
Q14: The value of a PO will fall
Q15: 11-17.The current industry standard for the model
Q16: 11-14.Servicing a pool of loans may NOT
Q17: A graph of the PSA model for
Q19: 11-10.If prepayments of a mortgage pool accelerate:
A)
Q20: 11-13.The duration of passthroughs can be measured
Q21: 11-22.An increase in the market rate of
Q22: 11-24.Payments of principal from a pool of
Q23: 11-23.A security for which the cash flows
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