You Own a Mortgage-Backed Security and You Will Receive Fixed

question 42

Multiple Choice

You own a mortgage-backed security and you will receive fixed semiannual interest payments and no principal payments as long as prepayments remain within a given range. If prepayments move outside the range,you will receive prepayments. You must be holding a ______________________.

• A)class C or lower sequential pay CMO
• B)PAC CMO
• C)PO security
• D)pass-through security
• E)CDO

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