The Most Common Type of Mortgage-Backed Security Is

question 19

Multiple Choice

The most common type of mortgage-backed security is

• A) the mortgage pass-through, a security that has the borrower's mortgage payments pass through the trustee before being disbursed to the investors.
• B) collateralized mortgage obligations, a security which reduces prepayment risk.
• C) the participation certificate, a security which passes the borrower's mortgage payments equally among all the owners of the certificates.
• D) the securitized mortgage, a security which increases the liquidity of otherwise illiquid mortgages.

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Definitions:

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The release of gases, such as carbon dioxide and methane, into the atmosphere, contributing to global warming and climate change.

Net Income

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The utilization of products or materials within industrial processes or in the production of goods, often implying commercial or large-scale applications.

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Funds spent by a firm to acquire or upgrade physical assets such as property, industrial buildings, or equipment to increase its value or productivity.