If Mortgage Interest Rates Fall and Prepayments Occur,the Holder of a GNMA

question 27

Multiple Choice

If mortgage interest rates fall and prepayments occur,the holder of a GNMA pass-through selling at a _____ will have a _____. I. discount; capital gain
II. premium; capital loss
III. discount; capital loss
IV. premium; capital gain

• A)I only
• B)I and III only
• C)I and II only
• D)II and IV only
• E)III and IV only

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Definitions:

Utero

The term refers to the uterus, indicating something related to or taking place within the uterus.

Tobacco

A plant and its product, primarily known for being smoked or chewed, containing the stimulant nicotine and associated with health risks such as cancer and heart disease.

Placenta

An organ that develops in the uterus during pregnancy, providing oxygen and nutrients to the growing baby and removing waste products from the baby's blood.

Birth Defects

Conditions that are present from birth, causing abnormalities in body structure, function, or metabolism.