In Regards to the Conditional Prepayment Rate (CPR), Which of the Below

Multiple Choice

In regards to the conditional prepayment rate (CPR) , which of the below statements is FALSE?

A) The CPR assumes that some fraction of the remaining principal in the pool is prepaid each year for the remaining term of the mortgage.
B) The CPR assumed for a pool is based on the characteristics of the pool (including its historical prepayment experience) and the current and expected future economic environment.
C) To estimate monthly prepayments, the CPR must be converted into a monthly prepayment rate, commonly referred to as the single-monthly mortality rate (SMM) .
D) A CPR of 5% corresponds to a SMM of 0.005143.