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1. What risk factors can cause the cash flow of a residential mortgage loan to be unknown? Prepayment risk Prepayment risk and credit risk Prepayment

1. What risk factors can cause the cash flow of a residential mortgage loan to be unknown?

Prepayment risk

Prepayment risk and credit risk

Prepayment risk and credit risk and liquidity risk

None of the above

2. All else equal, which of the following would have the lowest risk of default?

15 year fixed rate mortgage with 103% LTV

15 year fixed rate mortgage with 90% LTV

15 year fixed rate mortgage with 80 LTV

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