A Major Source of Risk Faced by GNMA Issues Is

question 76

Multiple Choice

A major source of risk faced by GNMA issues is

• A) Default risk.
• B) Prepayment risk.
• C) Counterparty risk.
• D) a and b.
• E) a, b and c.

---

Definitions:

Accumulated Depreciation

The total amount of depreciation expense that has been charged to a fixed asset since it was in service, reducing its book value.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in its life, reflecting the loss of value over time.

Fair Market Value

The price at which an asset would sell in the marketplace, assuming both buyer and seller are knowledgeable, willing, and under no pressure to buy or sell.

Trade-In Allowance

The amount credited to a buyer for trading in an old item towards the purchase of a new item, reducing the price of the new purchase.