CFA Practice Question
Which of the following is correct?
A. Commercial Paper is long maturity corporate debt.
B. MBS payments are backed by the principal and interest payments of a pool of corporate debt.
C. General Obligation (GO) are backed by all revenues (full faith) of the issuing municipality.
Explanation: Commercial Paper is short maturity corporate debt. MBS payments are backed by the principal and interest payments of a pool of residential mortgage debt.
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