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What is the primary distinction between mortgage-related securities backed by residential mortgages (RMBS) and those backed by commercial mortgages (CMBS)? Default is the key risk

  1. What is the primary distinction between mortgage-related securities backed by residential mortgages (RMBS) and those backed by commercial mortgages (CMBS)?
  1. Default is the key risk with residential mortgages; prepayment is the key risk with commercial mortgages
  2. Interest rate risk is the key risk with residential mortgages; prepayment is the key risk with commercial mortgages
  3. Prepayment is the key risk with residential mortgages; default is the key risk with commercial mortgages
  4. Prepayment is the key risk with residential mortgages; interest rate risk is the key risk with commercial mortgages

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