Which One of the Following Will Maximize the Value of an IO

question 44

Multiple Choice

Which one of the following will maximize the value of an IO strip?

• A)prepaying all mortgages in the underlying mortgage pool
• B)minimizing the duration of the underlying mortgage pool
• C)maximizing the value of the PO strip
• D)amortizing the bonds in the underlying pool faster than anticipated
• E)creating conditions where no prepayments occur in the underlying mortgage pool

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Definitions:

Depressants

Substances that reduce neural activity and slow down the functions of the central nervous system.

Stimulants

Drugs that increase activity in the brain and nervous system, leading to increased alertness, attention, and energy.

Tetrahydrocannabinol

A principal psychoactive constituent of cannabis, responsible for its mind-altering effects.

Psilocybin

A naturally occurring psychedelic compound produced by more than 200 species of mushrooms, known for its ability to induce altered states of consciousness.