#Mortgage-Backed Securities Quiz

What is the biggest risk faced by investors in MBS backed by high-quality mortgages and/or backed by strong credit enhancement or guarantees?

A) Credit Risk

B) Default Risk

C) Prepayment Risk

D) All are equally important

Reveal the Answer

The answer is C) Prepayment Risk – Given the credit (default) risk minimization implied in the question, the biggest uncertainty will be the rate at which the mortgage is prepaid.

Mortgage Backed Securities

Understand the types of MBS, factors that influence their investment characteristics, analytic techniques used to evaluate risk and return, and MBS trading/settlement.

Questions or Comments?

Call Us:

+1 347 842 2501

Email Us