True or False: Mortgage-backed securities (MBS) have negative convexity

Group of answer choices

[A] TRUE

[B] FALSE

Which of the following non-mortgage asset-backed securities is(are) amortizing loans?

Group of answer choices

[A] Auto loan-backed securities

[B] Credit card receivable-backed securities

[C] Both A and B

[D] Neither A nor B

Which of the following is a property of an Interest Only (IO) strip in the domain of MBS?

Group of answer choices

[A] Is purchased at a substantial discount from par value.

[B] The faster the prepayments, the higher the yield the investor will realize.

[C] The IO investor receives only interest on the amount of the principal outstanding.

[D] Have priority over all other classes in the CMO issue in receiving principal payments from the underlying collateral.