Which of the Following Is True About Mortgage-Backed Securities? I)

question 59

Multiple Choice

Which of the following is true about mortgage-backed securities? I) They aggregate individual home mortgages into homogeneous pools.II) The purchaser receives monthly interest and principal payments received from payments made on the pool.III) The banks that originated the mortgages maintain ownership of them.IV) The banks that originated the mortgages may continue to service them.

• A) II, III, and IV
• B) I, II, and IV
• C) II and IV
• D) I, III, and IV
• E) I, II, III, and IV

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Definitions:

Strong-Form Efficient

A hypothesis that states all information, both public and private, is completely reflected in stock prices, and no one can consistently achieve higher returns.

Realized Return

The actual gain or loss experienced on an investment over a specified period, taking into account dividends, interest, and capital gains.

Closing Stock Market Quotes

The final listing of the price of a security at the close of a trading day on a stock exchange.

Buy Or Sell Stock

The action of purchasing (buying) or offloading (selling) shares of a company through a stock exchange or other trading platforms.