A Falling Rate of Market Interest Would Have Which of the Following

question 17

Multiple Choice

A falling rate of market interest would have which of the following impacts on a mortgage pass-through security?

• A) Increase prepayments on loans in the pool
• B) Decrease prepayments on loans in the pool
• C) Decrease the market value of the MPT
• D) Both A and C
• E) Both B and C

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Definitions:

Analysis of Variance

A collection of statistical models and their associated procedures which compare means by partitioning variance into components attributable to various sources of variability.

Group Means

The average values obtained from different groups in a study, often used in research to compare and contrast groups.

Procedure

A set procedure or method followed in a scientific study or test to achieve certain objectives or results.

More Than Two Groups

A situation in statistical analysis where comparisons are made among three or more distinct groups or categories.