26-69 Which of the Following Is the Principle Source of Prepayment

question 51

Multiple Choice

26-69 Which of the following is the principle source of prepayment risk on a typical FNMA mortgage-backed pass-through security?

• A)Refinancing.
• B)Default risk.
• C)Housing turnover.
• D)Non-assumable mortgages.
• E)All of the above.

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Definitions:

Standard

A benchmark or guideline used to measure or set the quality, quantity, or value of products or processes.

Variable Overhead Efficiency Variance

The difference between the actual level of activity (direct labor-hours, machine-hours, or some other base) and the standard activity allowed, multiplied by the variable part of the predetermined overhead rate.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on activity levels such as labor hours or machine hours.

Actual Level Of Activity

The real measure of how much work is performed or output is produced in a given period, often compared to planned or standard levels of activity.