Which One of the Following Is Required for the Cash

question 3

Multiple Choice

Which one of the following is required for the cash flows on a PAC bond to be predictable?

• A)market interest rates must remain constant
• B)market interest rates must steadily decline
• C)mortgage prepayments must remain within the PAC collar
• D)PAC support bonds must be prepaid in a timely manner
• E)mortgage prepayments must exceed the specified PSA schedule

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Definitions:

Activity-based Costing

A cost allocation technique that assigns overhead and indirect costs to relevant products and services based on the activities they demand.

Machining

The process of shaping, cutting, or altering a material using machines or tools, often used in the manufacturing of parts or components.

Activity-based Costing

Activity-based costing (ABC) is a method of assigning overhead and indirect costs to specific products or activities based on their usage.

Machining

The process of cutting, shaping, or removing material from a workpiece using machines or tools, often for manufacturing purposes.