问题 单项选择题

Based on the following information to answer questions from 39 to 40:

A mortgage-backed security has been divided into three classes or tranches as follows:

Tranche Ⅰ receives net interest and all the principal payments until it is completely paid off.

Tranche Ⅱ receives its share of net interest and starts receiving all the principal repayments after

Tranche Ⅰ has been completely paid off. Prior to that, it only receives interest payments.

Tranche Ⅲ receives monthly net interest and starts receiving all principal repayments after

Tranches Ⅰ and Ⅱ have been completely paid off. Prior to that, it only receives interest payments.

For a relatively small decline in mortgage interest rates, which of the tranches has the least amount of prepayment risk()

A. Tranche Ⅲ.

B. Tranche Ⅰ.

C. Tranche Ⅱ.

答案

参考答案:A

解析:

Tranche Ⅲ has the least amount of prepayment risk since it receives the prepayments last.

判断题
单项选择题