The Greater the Prepayment Rate for a Mortgage Pool, The

question 55

Multiple Choice

The greater the prepayment rate for a mortgage pool, the:

• A)slower the payments to the holders of the bonds supported by the pool.
• B)greater the decline in the bond principal for bonds supported by the pool.
• C)longer the age of the mortgages held in the underlying pool.
• D)lower the PSA benchmark rate.
• E)greater the default risk.

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