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10. You buy a mortgage pass through security with a 7.5% coupon rate and a 7.5% discount rate. The price at the time of purchase
10. You buy a mortgage pass through security with a 7.5% coupon rate and a 7.5% discount rate. The price at the time of purchase reflects a 10% annual prepayment rate. One hour after your purchase, the expected annual prepayment rate falls to 5%. The value of your mortgage pass through security should:
(A) remain the same
(B) rise
(C) fall
(D) the answer cannot be determined with the given information
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