Assume that a pass through security has been stripped and the principal only and interest only components are sold separately. Choose the answer that best completes the following sentence: If prepayments decrease, The principal only cash flow yield wil go down and the interest only cash flow yield will go up. O The principal only cash flow yield wil go up and the interest only cash flow yield will go up. O The principal only cash flow yield wil go down and the interest only cash flow yield will go down. O The principal only cash flow yield wil go up and the interest only cash flow yield will go down.
Assume that a pass through security has been stripped and the principal only and interest only components are sold separately. Choose the answer that best completes the following sentence: If prepayments decrease, The principal only cash flow yield wil go down and the interest only cash flow yield will go up. O The principal only cash flow yield wil go up and the interest only cash flow yield will go up. O The principal only cash flow yield wil go down and the interest only cash flow yield will go down. O The principal only cash flow yield wil go up and the interest only cash flow yield will go down.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Assume that a pass through security has been stripped and
the principal only and interest only components are sold
separately. Choose the answer that best completes the
following sentence:
If prepayments decrease,
The principal only cash flow yield wil go down and the interest
only cash flow yield will go up.
O The principal only cash flow yield wil go up and the interest only
cash flow yield will go up.
O The principal only cash flow yield wil go down and the interest
only cash flow yield will go down.
O The principal only cash flow yield wil go up and the interest only
cash flow yield will go down.
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