Question

Which of the following statements regarding mortgage-backed bonds is generally TRUE?
(A) The total value of the MBBs issued usually equals the value of the mortgages in the underlying pool
(B) Unlike corporate bonds, MBBs usually are issued with variable coupon rates of interest
(C) Overcollateralization of the mortgage pool assures investors that the income from mortgage will be sufficient to pay the interest on bonds and the principal upon maturity
(D) All of the above

Answer

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