Which rmbs is affected more by an interest rate change

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Reference no: EM132039379

Consider two RMBS, A and B. A has a higher prepayment rate than B.

Which RMBS is affected more by an interest rate change? Why?

Which RMBS has a higher duration? Why?

Which RMBS does better when rates fall? Which does better when rates rise? Why?

Reference no: EM132039379

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