- CFA Exams
- CFA Exam: Level I 2021
- Study Session 14. Fixed Income (1)
- Reading 45. Introduction to Asset-Backed Securities
- Subject 3. Residential Mortgage Loans
CFA Practice Question
During the lockout period, ______ is (are) paid out to non-amortizing security holders.
II. principal prepayments
III. interest only
IV. nothing
I. scheduled principle repayments
II. principal prepayments
III. interest only
IV. nothing
Correct Answer: III
By the way, there is no "scheduled principle payments/prepayment" concept in non-amortizing securities.
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