Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The uncertainty that the actual cash flows received by MBS investors will be different than the originally scheduled cash flows due to borrowers' ability to

The uncertainty that the actual cash flows received by MBS investors will be different than the originally scheduled cash flows due to borrowers' ability to repay/refinance mortgages early is called

A.

credit risk.

B.

interest rate risk.

C.

prepayment risk.

A business entity that exists for the purpose of purchasing mortgages and securitizing them is

A.

a mortgage finance company.

B.

a special purpose vehicle.

C.

a mortgage bond trustee.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Basic Finance An Introduction To Financial Institutions, Investments And Management

Authors: Herbert B Mayo

9th Edition

0324322291, 9780324322293

More Books

Students also viewed these Finance questions