Which of the Following Is NOT True of an R

question 84

Multiple Choice

Which of the following is NOT true of an R class CMO issue?

• A)It is treated as "garbage class."
• B)It is a high-risk investment class.
• C)It gives the investor the rights to the over-collateralization and reinvestment income on the cash flows in the CMO trust.
• D)Returns increase when interest rates increase.
• E)It has a positive duration.

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Definitions:

Assets

Economic resources or valuable items owned by a business, capable of being converted into cash or used in generating revenue.

Liabilities

Financial obligations a company owes to outside parties, such as loans or accounts payable.

Furniture

Movable articles intended to support various human activities such as seating, eating, and sleeping, often used to outfit a living or working space.

Cash

Money in the form of currency that can be used immediately for transactions, considered the most liquid asset.