# Unit 8 Part 2 Quiz

A mortgage pass-through bond (MPTB) can be described by all of the following except:
an MPTB can be viewed as a mortgage-backed bond with the pass-through of principal and prepayment features of a mortgage pass-through security.
all of the above are true.
an MPTB represents an undivided equity ownership interest in a mortgage pool.
most MPTBs are based on residential mortgage pools and are generally overcollateralized.
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A mortgage pass-through bond (MPTB) can be described by all of the following except:
an MPTB can be viewed as a mortgage-backed bond with the pass-through of principal and prepayment features of a mortgage pass-through security.
all of the above are true.
an MPTB represents an undivided equity ownership interest in a mortgage pool.
most MPTBs are based on residential mortgage pools and are generally overcollateralized.
In comparison to the mortgage securities we have previously discussed, the unique characteristic of a CMO is that:
the CMO is a pay-through in which all amortization and prepayments flow through to investors
the CMO mortgage pool is not overcollateralized.
CMOs are issued in multiple security classes.
the CMO issuer retains the ownership of the underlying mortgage pool.
Which of the following is NOT characteristic of commercial-backed mortgage securities?
The underlying mortgage pool represents a variety of different property types (retail, multifamily, etc.) and a specific geographical area
The underlying mortgages have usually been outstanding for several years
One of the primary issuers of such securities are insurance companies
In general, the underlying mortgage pool for such securities contain fewer mortgages than are included in residential-backed mortgage pools
Duration, as referred to in the chapter, is:
a measure of the weighted-average time required before all principal and interest is received on an investment.
a measure of the extent to which different investments expose an investor to interest rate risk.
all of the above.
a measure that takes into account both the size of cash flows and the timing of their receipt.
A calamity call allows the issuer to recall all securities for a specified time after issue in the event that all but which of the following occurs?
Interest rates decline sharply.
Reinvestment rates are below what was promised to investors.
Prepayments accelerate.
Investors want to cash out their positions.