If the Prepayment Schedule for a Mortgage Pool Increases to 100

question 21

Multiple Choice

If the prepayment schedule for a mortgage pool increases to 100 PSA from 50 PSA,the related interest-only strips will ________ in value and the related principal-only strips will ________ in value.

• A) decrease; decrease
• B) decrease; increase
• C) increase; decrease
• D) increase; increase
• E) remain constant; remain constant

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Definitions:

Body Temperature

The measure of the body's ability to generate and get rid of heat, essential for the proper function of enzymes and bodily processes.

Boiling

The rapid vaporization of a liquid when it is heated to its boiling point, the temperature at which it changes phase from liquid to gas.

Fahrenheit

A scale for measuring temperature where 32°F is the point at which water freezes and 212°F is the point at which it boils under normal atmospheric pressure.

Hypothalamus

A region of the brain that controls an enormous number of bodily functions including emotions, the autonomic nervous system, and the endocrine system.