Bonds Representing a Claim on the Cash Flows of a Pool

question 17

Multiple Choice

Bonds representing a claim on the cash flows of a pool of mortgages are ________. Their investment returns are based on the pool.

• A) capitalized mortgages
• B) mortgage pass-throughs
• C) mortgage capitalization bonds
• D) mortgage trusts
• E) marketable mortgage certificates

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Definitions:

Cancer Cell

A cell that divides uncontrollably, forming tumors and potentially spreading to different parts of the body (metastasizing).

Fixed Order Cost

Represents the constant expenses associated with placing an order for goods or materials, regardless of the order size.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.

Cycle Inventory

The portion of inventory available to meet normal demand during a given period without restocking.