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FIGURE 8.6 The prepayment relationship Prepayment function y = current mortgage rate Prepayment frequency original mortgage rate 296 +2% +4% 0 Prepayment and other fees

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FIGURE 8.6 The prepayment relationship Prepayment function y = current mortgage rate Prepayment frequency original mortgage rate 296 +2% +4% 0 Prepayment and other fees + (Y-r) (Y-1) If the current rate (y) is 8%and the original rate (t) is 4%, then we expect the prepayment function to move to the left. Select one: O True O False

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