A Stripped Mortgage-Backed Security Is Created by Distributing the Principal

question 23

True/False

A stripped mortgage-backed security is created by distributing the principal and interest from a pool of underlying mortgages on an equal basis to two classes of securityholders.

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Definitions:

Chargeout Rates

The rates charged to clients for services, often reflecting labor, overheads, and a margin for profit, used by consultancy and service-based businesses.

Billable Hour

The amount of time spent on a specific client's project that can be charged to that client, commonly used in legal and consulting services.

Realisation Rate

The percentage of billable hours or the revenue earned out of the total available hours or potential revenue, often used to measure the efficiency and profitability of professional services.

Chargeout Rate

The price charged by a business or professional for their services, often calculated to cover costs and generate profit.