Question
Consider the following statements about mortgage and mortgage securities: Statement 1: Prepayments of mortgage generally increase as interest rates increase. Statement 2: Mortgage passthrough securities
Consider the following statements about mortgage and mortgage securities:
Statement 1: Prepayments of mortgage generally increase as interest rates increase.
Statement 2: Mortgage passthrough securities eliminate prepayment risk.
Are the statements most likely correct or incorrect?
| A. | Both statements are incorrect | |
| B. | Statement 1 is incorrect, but Statement 2 is correct | |
| C. | Statement 1 is correct, but Statement 2 is incorrect | |
| D. | None of the above |
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Financial Management
Authors: Rajiv Srivastava, Anil Misra
2nd Edition
0198072074, 9780198072072
