If the Prepayment Schedule for a Mortgage Pool Increases from 50

question 61

Multiple Choice

If the prepayment schedule for a mortgage pool increases from 50 PSA to 100 PSA, the related interest-only strips will ________ in value and the related principal-only strips will ________ in value.

• A)decrease; decrease
• B)decrease; increase
• C)increase; decrease
• D)increase; increase
• E)remain constant; remain constant

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Definitions:

Chi-square Statistic

A value used to assess how well observed frequencies match expected frequencies, important in evaluating categorical data relationships.

Puerto Ricans

A term referring to people who are citizens of Puerto Rico or those of Puerto Rican descent.

Two-Way Tables

Two-way tables categorize data into two dimensions, helping to analyze the relationship between two categorical variables.

Null Hypothesis

A default statement that there is no effect or no difference, used as a starting point for statistical hypothesis testing.