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If the Prepayment Schedule for a Mortgage Pool Increases to 100

Question 21

Multiple Choice

If the prepayment schedule for a mortgage pool increases to 100 PSA from 50 PSA,the related interest-only strips will ________ in value and the related principal-only strips will ________ in value.


A) decrease; decrease
B) decrease; increase
C) increase; decrease
D) increase; increase
E) remain constant; remain constant

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