The Greater the Prepayment Rate for a Mortgage Pool, The

question 55

Multiple Choice

The greater the prepayment rate for a mortgage pool, the:

• A)slower the payments to the holders of the bonds supported by the pool.
• B)greater the decline in the bond principal for bonds supported by the pool.
• C)longer the age of the mortgages held in the underlying pool.
• D)lower the PSA benchmark rate.
• E)greater the default risk.

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Definitions:

Fungal Infection

A disease condition caused by the growth of fungi in or on the body, leading to symptoms like itching, rashes, or more severe systemic issues.

Contagious

Having a disease that can easily be transmitted to others.

Lesions

Abnormal changes or damage in body tissues, organs, or skin, often visible as sores or wounds.

Parasites

Species that reside within or on a host organism, obtaining their nourishment to the detriment of their host.