Which of the Below Statements Is FALSE

Multiple Choice

Which of the below statements is FALSE?

A) A stripped mortgage-backed security is created by distributing the principal and interest from a pool of underlying mortgages on an unequal basis to two classes of securityholders.
B) A stripped mortgage-backed security is another example of a derivative mortgage security.
C) Stripped mortgage-backed securities cannot be used to hedge a portfolio exposed to prepayment risk.
D) There are two types of stripped mortgage-backed securities: partially stripped and IO/PO securities.