You Own a Mortgage Passthrough

question 6

Multiple Choice

You own a mortgage passthrough. Which one of the following statements correctly describes the payments you will receive on that security?

• A)The payments will decrease at a constant rate over the life of the security.
• B)The payments will increase at a decreasing rate over the life of the security.
• C)The payments will be fixed for the life of the security.
• D)The payments will vary depending upon the amount paid on the underlying mortgages each period.
• E)The payments will decrease based on the interest shown on the amortization schedule.

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Definitions:

Generalized Feelings

Broad or widespread emotional responses that are not specific to one particular cause or object.

Less Intense

Refers to a situation, condition, or feeling that is not as strong or extreme as it could be.

Mood

A temporary state of mind or feeling that can affect an individual's perception and behavior but is less specific than emotions.

Specific Object

A clearly defined item or entity that can be identified or distinguished from others.