Which of the Following Are Correct Regarding Mortgage-Backed Securities

question 3

Multiple Choice

Which of the following are correct regarding Mortgage-backed securities?
I.Interest only passes through to the investor.
II.Invest in a pool of mortgage loans.
III.Principal only passes through to the investor.
IV.Referred to as a pass-through security.

• A)I,II.
• B)II,III,
• C)II,IV.
• D)III,IV

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Definitions:

Reinforcement

The process by which a stimulus or event strengthens or increases the probability of the response that it follows.

Stimulus

Any event or situation that evokes a response.

Higher-Order Conditioning

A process in classical conditioning by which a stimulus that was previously neutral is paired with a conditioned stimulus to produce the same conditioned response as the conditioned stimulus.

Secondary Reinforcer

A stimulus that gains its reinforcing power through its association with a primary reinforcer.