Multiple Choice
What is the primary distinction between mortgage-related securities backed by residential mortgages and those backed by commercial mortgages?
A) Default is the key risk with residential mortgages; prepayment is the key risk with commercial mortgages
B) Interest rate risk is the key risk with residential mortgages; prepayment is the key risk with commercial mortgages
C) Prepayment is the key risk with residential mortgages; default is the key risk with commercial mortgages
D) Prepayment is the key risk with residential mortgages; interest rate risk is the key risk with commercial mortgages
Correct Answer:
Verified
Correct Answer:
Verified
Q20: These items are hybrid securities that contain
Q21: Class A investors are sometimes repaid with
Q22: Investors retain prepayment risk on MBBs,but issuers
Q23: CMO investors only pay taxes on interest
Q24: A mortgage company is issuing a CMO
Q26: The credit rating of an MPTB depends
Q27: Cash flows remaining after all CMO tranches
Q28: In comparison to other mortgage-backed securities,the unique
Q29: From the issuer's perspective,the use of MBBs
Q30: CDOs often include "B" notes,mezzanine debt and