Which One of the Following Statements Regarding PAC Bonds Is

question 75

Multiple Choice

Which one of the following statements regarding PAC bonds is correct?

• A) The cash flows from a PAC bond are less certain than those from a Z-tranche bond from a sequential CMO.
• B) PAC bondholders receive the residual cash flows from the underlying mortgage pool.
• C) PAC bonds are defined by the specific rules which created them.
• D) PAC bonds have bounds based on market interest rates.
• E) PAC bond cash flows are unaffected by mortgage prepayments.

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Definitions:

Memories

A record or storage of experiences, information, and skills learned over time, retained in the human brain.

Trait Theories

Theories that focus on identifying, describing, and measuring individual differences in behavioral predispositions.

Psychoanalytic Theories

A set of theories originating from the work of Sigmund Freud that focus on the unconscious mind and its impact on human behavior.

Humanistic Theories

Theories that view personality with a focus on the potential for healthy personal growth.