Although the Priority Rules for the Disbursement of the Principal

Multiple Choice

Although the priority rules for the disbursement of the principal payments are known, the precise amount of the principal in each period ________ known. This will depend on the cash flow and, therefore, on the principal payments of the collateral, which will depend on the ________ of the collateral. An assumed ________ allows the cash flow to be projected.

A) is; actual prepayment rate; PSA speed
B) is not; actual prepayment rate; PSA speed
C) is; projected prepayment rate; CPR speed
D) is not; actual prepayment rate; SMM speed