Callable Bonds and Mortgage Backed Securities Both Have Prepayment Risk

question 66

True/False

Callable bonds and mortgage backed securities both have prepayment risk.

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Definitions:

Availability Heuristic

A mental shortcut that relies on immediate examples that come to mind when evaluating a specific topic, concept, method, or decision.

Celebrity Marriages

Marriages between individuals who are highly recognized or famous, often attracting public fascination and media attention.

Representativeness Heuristic

A mental shortcut used to judge the probability of an event by how much it resembles a typical case.

Simulation Heuristic

The simulation heuristic is a psychological theory that explains how people determine the likelihood of an event based on how easy it is to visualize the event happening.