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Which of the Following Is the Is a Source of Prepayment

question 61

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Which of the following is the is a source of prepayment risk on a typical NHA mortgage-backed pass-through security?


Definitions:

Purchasing-Power Parity

An economic theory that states that the exchange rate between two currencies is equal to the ratio of the currencies' respective purchasing powers.

Inflation

A rise in the general level of prices of goods and services in an economy over a period of time, eroding purchasing power.

Depreciate

A decrease in the value of an asset over time, often due to wear and tear or obsolescence.

Nominal Exchange Rate

The rate at which one country's currency can be exchanged for another country's currency without adjustment for inflation rates.

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