A Security That Pays Off the Return from a Combination

question 34

Multiple Choice

A security that pays off the return from a combination of mortgages is called a

• A)homeowners' equity claim
• B)mortgage portfolio
• C)mortgage option
• D)mortgage-backed security
• E)none of the above

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Definitions:

Riskless Securities

Financial instruments that are considered to have minimal risk of loss, typically issued by governments.

Risk Premium

The additional return expected by an investor for holding a riskier asset compared to a risk-free asset.

Risk Levels

The degree to which an investor or business is exposed to potential financial loss or gains.

Standard Deviation

An evaluative statistical figure expressing the level of fluctuation or diversity among values in a particular dataset.