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Question 1 Which of the following impacts does a falling market interest rate have on the market value of a mortgage-backedsecurity (MBS)? Increase the market

Question 1

Which of the following impacts does a falling market interest rate have on the market value of a mortgage-backedsecurity (MBS)?

Increase the market value of the MBS

Decrease the market value of the MBS

Increase or decrease the value, depending on whether the MBS is issued at a premium or a discount

The market rate of interest has no impact on the market value of a MBS

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