QUESTION 5

TRUE / FALSE. Conforming loan requirements are set by each bank and can vary widely.

		TRUE
		FALSE

2 points

QUESTION 6

Which of the following is NOT TRUE about Mortgage Backed Securities (MBS)?

	A.	MBS repays principal throughout the life of the investment
	B.	MBS are long duration assets that investors can match with long term liabilities
	C.	All MBS are safe assets
	D.	MBS provides liquidity for an otherwise illiquid asset
	E.	There are tax benefits associated with investing in MBS

3 points

QUESTION 7

Which statement is true about Weighted Average Life and Weighted Average Maturity?

	A.	WAL is always strictly longer than WAM
	B.	In a positive amortization loan, WAL is longer than WAM
	C.	In an interest only loan WAL and WAM are the same
	D.	WAL is always strictly shorter than WAM
	E.	WAL is always the same as WAM