$($Select all of the choices that apply.$)$

A$.$ Holders of the GNMA securities face payment risk because homeowners have the option to prepay their debt whenever they decide to do so$.$

B$.$ In particular, homeowners will prepay if interest rates rise and they can refinance at the new interest rate. This is precisely when the holders of GNMA securities would like

to avoid payments, since they can only reinvest at a higher interest rate.

C$.$ Holders of the GNMA securities face payment risk because GNMA has the option to force homeowners to repay their debt whenever interest rates rise.

D$.$ In particular, homeowners will prepay if interest rates fall and they can obtain new debt at a lower interest rate. This is precisely when the holders of GNMA securities

would like to avoid payments because they can only reinvest at a lower interest rate.