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A finance company has a portfolio of home loans. It expects interest rates to fall in the near future. Investing in which of the following
A finance company has a portfolio of home loans. It expects interest rates to fall in the near future. Investing in which of the following securities issued from a pool of mortgage loans will offer the HIGHEST speculative benefit to the company? Select one: a. Mortgage-backed bonds b. The pass-through securities c. The most senior tranche (tranche A) in a CMO d. IO strip in a CMO e. PO strip in a CMO
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