A $25,000 Face Value GNMA Pass-Through Quote Sheet Lists a Spread

question 3

Multiple Choice

A $25,000 face value GNMA pass-through quote sheet lists a spread to average life of 103,PSA of 220,and a price of 101-09. This means that
I. the pass-through yield is 103 basis points above the comparable maturity Treasury bond.
II. the pass-through is being prepaid more quickly than standard PSA.
III. the pass-through is priced at $25,272.50.

• A)I,II,and III are correct.
• B)I and II only
• C)I and III only
• D)II and III only
• E)III only

Prepare journal entries related to foreign currency transactions and hedge accounting.

Analyze the impact of changes in exchange rates on the financial statements.

Apply accounting standards for hedge accounting, including documentation and effectiveness testing requirements.

Understand and describe the equity method of accounting for investments.

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Definitions:

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Avoidance Motivation

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