In an Agency CMO, There Is ________

question 30

Multiple Choice

In an agency CMO, there is ________. What is being done in creating the different tranches is the redistribution of ________. In contrast, in ________, there is both credit risk and prepayment risk.

• A) no credit risk; prepayment risk; a nonagency CMO
• B) credit risk; prepayment risk; a nonagency CMO
• C) no credit risk; payment risk; an agency CMO
• D) credit risk; payment risk; an agency CMO

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Definitions:

Real Estate Development

The process of purchasing land, financing real estate deals, building or having buildings constructed, and selling or leasing the finished product to end-users.

Express Authority

Is the specific powers granted by a principal to an agent in a contractual agreement to perform certain actions on behalf of the principal.

Disclosed Principal

In agency law, a principal whose identity is known by the third party at the time the agent makes a contract with the third party.

Doctrine of Estoppel

A legal principle that prevents a party from denying or asserting anything to the contrary of what has previously been established as truth.