Which of the Below Statements Is TRUE

question 46

Multiple Choice

Which of the below statements is TRUE?

• A) The pass-through securities issued by Freddie Mac are referred to as Mortgage-Backed Securities; Fannie Mae uses the term Participation Certificate (PC) to describe its pass-through security.
• B) An investor who owns pass-through securities knows what the cash flow will be.
• C) A mortgage loan effectively grants the borrower the right to call the loan at a discount.
• D) The adverse consequence when mortgage rates decline is referred to as contraction risk.

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Definitions:

Titanium

A strong, light, corrosion-resistant metal with the highest strength-to-density ratio of any metallic element.

GDP

Gross Domestic Product, a measure of the economic production and growth, which quantifies the total value of all goods and services produced over a specific time period within a country.

Bicycle Company

A business entity that specializes in the manufacturing, distribution, and sale of bicycles and related equipment and accessories.

National Income

The total income earned by a nation's people and businesses, including salaries, profits, and investment income, within a specific period.