QUESTION 18

1. How many of the following statements regarding mortgage pass-through securities are false?

Statement 1: Weighted average coupon rate is the coined term for the stated rate of this type of securities.

Statement 2: Prepayment speed of the pool of residential mortgages has a monthly and annualized measurement. Conditional prepayment rate is the annualized measure while the unconditional prepayment rate is the monthly measure.

Statement 3: The classification of mortgage between conforming and nonconforming depends on whether it satisfied underlying standards of government agencies issuing mortgaged backed securities.

	a.	0
	b.	1
	c.	2