Total amount of risk in mortgage-backed pool

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Reference no: EM131917007

1. A CMO is a pass-through security.

True

False

2. Creating a CMO reduces the total amount of risk in a mortgage-backed pool.

True

False

3. A _____ is a treasury security that has been partitioned into different securities.

Rule 144A bond

IDB bond

revenue bond

STRIP

4. The contract that defines the legal rights of bond issuers and bondholders is called the

covenant

debenture

encumbrance

indenture

5. ARMs reduce interest rate risk for I. the borrower, II. the lender

I only

II only

I and II

Neither

Reference no: EM131917007

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