Explain the Payment Pattern on a GNMA Pass-Through and a New

question 17

Essay

Explain the payment pattern on a GNMA pass-through and a new Class B CMO when interest rates fall. Which has more predictable payments,and why would an investor care?

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Definitions:

S&P 500 Index

A stock market index that measures the stock performance of 500 large companies listed on stock exchanges in the United States, often used as a benchmark.

Bushels

A unit of volume that is used in the United States for measuring agricultural commodities like grains and fruits.

Corn

Refers to a cereal plant that yields large kernels on a cob, also a staple food in various regions.