Which One of the Following Is a Mortgage-Backed Security That

question 41

Multiple Choice

Which one of the following is a mortgage-backed security that has first priority to scheduled principal payments?

• A) priority strip bond
• B) principal strip
• C) amortized principal strip
• D) protected amortization class bond
• E) principal priority tranche

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Definitions:

Depositary Bank

A financial institution that holds and manages the deposits of securities for investors, facilitating the trading of these securities.

Payor Bank

The bank on which a check is drawn and that is responsible for paying the amount of the check to the holder.

Collection Process

The steps taken by creditors or agencies to recover debts owed by individuals or businesses, often involving contacting the debtor, negotiating payment plans, and possibly legal action.

Demand Instrument

A financial document or instrument that requires payment of a particular sum of money immediately or on demand by the entitled party.