What Is the Primary Distinction Between Mortgage-Related Securities Backed by Residential

question 19

Multiple Choice

What is the primary distinction between mortgage-related securities backed by residential mortgages and those backed by commercial mortgages?

• A) Default is the key risk with residential mortgages; prepayment is the key risk with commercial mortgages
• B) Interest rate risk is the key risk with residential mortgages; prepayment is the key risk with commercial mortgages
• C) Prepayment is the key risk with residential mortgages; default is the key risk with commercial mortgages
• D) Prepayment is the key risk with residential mortgages; interest rate risk is the key risk with commercial mortgages
• E) There are no significant distinctions

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