Which of the Following Affect the Value of a PO

question 92

Multiple Choice

Which of the following affect the value of a PO strip based on a GNMA bond?
I. changes in the PSA schedule
II. prepayment rates
III. time value of money
IV. changes in the default rates for the underlying mortgages

• A)I and II only
• B)II and III only
• C)I, II, and III only
• D)I, II, and IV only
• E)I, II, III, and IV

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Definitions:

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An outlook or system of thought attaching prime importance to human rather than divine or supernatural matters, emphasizing common human needs and seeking rational ways of solving human problems.