Sản phẩm & Rủi roCâu 157 / 398
An investor in a GNMA pass-through security is most exposed to prepayment risk when:
a.Interest rates rise and homeowners hold their mortgages longer
b.The issuer defaults on the underlying loans
c.Interest rates fall and homeowners refinance their mortgages early
d.The bond reaches its stated final maturity
Giải thích
Prepayment risk is the danger that homeowners will pay off their mortgages early, returning principal to investors sooner than expected. This happens most when interest rates fall and borrowers refinance at lower rates. The investor then must reinvest the returned principal at the new, lower prevailing rates, reducing expected income.
Luyện miễn phí toàn bộ 398 câu hỏi — không cần đăng ký.
Câu hỏi liên quan cùng chủ đề
- A client wants a government-backed security whose cash flow comes from homeowners' monthly mortgage payments and carries the full faith and credit of the U.S. government. The best fit is:
- Parents want a tax-advantaged account to save for their child's future college tuition, with tax-free withdrawals for qualified education costs. The most appropriate choice is:
- A U.S. investor buys a bond denominated in euros. The euro then falls sharply against the dollar. The investor has been hurt primarily by:
- An investor must sell a thinly traded, small-issue municipal bond quickly but can only find a buyer at a price well below fair value. This illustrates:
- An investor who wants a portfolio that is LESS volatile than the overall market should favor stocks with:
- Which of the following is a characteristic shared by money-market instruments such as T-bills, commercial paper, and banker's acceptances?
Cập nhật gần nhất: · quy trình kiểm tra
Đội Ngũ Biên Tập PrepPass · Đối chiếu với FINRA Securities Industry Essentials (SIE) Exam · Quy trình kiểm tra