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Question
A pass-through security is best characterized as
A. a multiclass mortgage-backed bond.
B. a security with a pro rata claim to the underlying pool of assets.
C. a bond backed by real estate.
D. a part of a loan assignment.
E. a part of a loan participation.
Answer
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Related questions
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Due to convexity problems, banks are actually better off using the simpler repricing model to manage interest rate risk rather than the duration model.
Q:
The cash flow from the interest a bank receives on a long-term loan that is normally reinvested is called the runoff from the loan.
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If a bank has a negative repricing gap, falling interest rates increase profitability.
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Explain how liquidity risk can lead to insolvency risk.
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In the absence of deposit insurance, a deposit is a _______________ to the bank's assets.A. pro rata claimB. first come/first serve claimC. full pay or no pay claimD. both A and BE. both B and C
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Q:
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B. Class B
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Q:
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Q:
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