CFA Practice Question
Which of the following is incorrect?
A. Freddie Mac provides credit and support to the commercial real estate sector by issuing securities that are backed by commercial real estate mortgage loans.
B. CMOs allow investors to choose how much prepayment risk they wish to be exposed to.
C. Mortgage (residential) pass through securities have significant prepayment risk.
Explanation: Freddie Mac provides support to the residential real estate sector.
User Contributed Comments 3
| User | Comment |
|---|---|
| paddypower | c. The use of the word significant is misleading |
| chandsingh | I think dont overthink these qs |
| GBolt93 | in what way? Most residential 15 and 30 year mortgages get paid off early. |