26-81 Why Are the Regular GNMA Pass-Throughs Not Very Attractive

question 2

Multiple Choice

26-81 Why are the regular GNMA pass-throughs not very attractive to insurance companies and pension funds seeking long-term duration assets to match their long-term duration liabilities?

• A)Because of their short expected duration.
• B)Because these bonds have the shortest average life with a maximum of prepayment protection.
• C)Because they are zero coupon bonds and hence carry maximum amount of risk.
• D)Because of their failures to offer prepayment protection.
• E)Bondholders receive the promised coupon and principal payments but are not entitled to accrued interest payments.

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Definitions:

Coping Patterns

Behavior strategies that individuals use to manage stress, adversity, or trauma, ranging from healthy mechanisms to maladaptive behaviors.

Recent Weight Changes

Alterations in body weight over a short period, which may indicate health issues or the effectiveness of a diet or exercise regimen.

Current Stressors

Present or recent external pressures or events that are causing stress or challenging an individual's ability to cope.

Increased Risk

A condition or situation that heightens the likelihood of suffering harm or negative outcomes.