CFA Practice Question

CFA Practice Question

Which of the following is FALSE of the cash flow yield?
A. It is generally calculated monthly and then annualized as appropriate.
B. It is commonly used for mortgage backed and other asset backed securities (as a measure for securities with prepayment risk).
C. It assumes that cash flows are reinvested at the YTM.
Explanation: The proper assumption would be that cash flows are assumed to be reinvested at the cash flow yield.

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