The spread is: A. Which of the following statements are TRUE about PAC tranches?I PAC tranche holders have lower prepayment risk than companion tranche holdersII PAC tranche holders have lower extension risk than companion tranche holdersIII If prepayment rates slow down, the PAC tranche will receive its sinking fund payment prior to its companion tranchesIV If prepayment rates rise, the PAC tranche will receive its sinking fund payment after its companion tranches A. I and II onlyB. $1,000B. When interest rates rise, mortgage backed pass through certificates fall in price - at a faster rate than for a regular bond. states' rights, On December 20, 1860, ______ formally repealed its ratification of the Constitution and withdrew from the Union. Which statements are TRUE when comparing PAC CMO tranches to "plain vanilla" CMO tranches?I Holders of PAC CMO tranches have lower prepayment riskII Holders of PAC CMO tranches have higher prepayment riskIII Holders of "plain vanilla" CMO tranches have lower prepayment riskIV Holders of "plain vanilla" CMO tranches have higher prepayment risk A. I and IIIB. The implicit rate of return is locked-in when the security is purchased, and the customer will earn that rate of return if the security is held to maturity.Like all original issue discount obligations, the Internal Revenue Code requires that the discount be accreted over the life of the receipt. $.0625 per $1,000C. For example, 30 year mortgages are now typically paid off in 10 years - because people move. This is true because when the certificate was purchased, assume that the average life of the underlying 15 year pool (for example) was 12 years. There is no deductible--There is a deductible on the building and a separate deductible on the contents. Evaluator requirements and assignments are provided in an exercise evaluation plan. Which clause of the Constitution allows Congress to carry out whatever law it needs to in order to carry out the Constitution's provisions? Determine the reasonableness of the estimate. All of the following are true regarding DIC policies, except: The minimum denomination on a mortgage backed pass through certificate is: A. Policies are written in increments of one million This "prepayment speed assumption" is used to "guesstimate" the expected life of a mortgage backed pass-through certificate. An exception is the interest income received from mortgage backed passthrough certificates (issued by GNMA, FNMA, FHLMC). I, II, IVD. This indicates that: A. f(x)=1+x+x2/5. II and IV. Because the interest rate moves with the market, the price stays close to par - as is the case with any variable rate security. O securities laws apply only to corporations that issue stock. D C. the interest on a policy loan is usually paid annually. LO 1.3 Which of the following is not true? Weve got your back. This is true because when the certificate was purchased, assume that the expected life of the underlying 15 year pool (for example) was 12 years. National Flood Cooperative Interest payments are still made pro-rata to all tranches, but principal repayments that are made earlier than the PAC maturity are made to the Companion classes before being applied to the PAC (this would occur if interest rates drop); while principal repayments made later than anticipated are applied to the PAC maturity before payments are made to the Companion class (this would occur if interest rates rise). When interest rates rise, the price of the tranche fallsB. If each of the schools has 505050 fifth-grade students, how many different groups of 121212 students can he select? Even though the interest rate is fixed, the holder receives a higher interest payment, due to the increased principal amount. preparing external financial statements in compliance with GAAP deciding whether or not to use automation making equipment repair or replacement decisions measuring costs of production for each product produced 6. A No physical certificates are issued. The best answer is D. Agency CMOs are created by Ginnie Mae, Fannie Mae, or Freddie Mac, using their own mortgage backed securities (MBSs) as the underlying collateral. Treasury ReceiptB. Organizations share a common purpose or mission. c. It is acceptable to present notes in a very extensive format. Treasury NoteC. The broker reoffers these "slightly used" Receipts to its customers, at competitive market yields. All of the following statements regarding collateralized mortgage obligations are true EXCEPT: A. varying maturities are available to meet a wide variety of investor needsB. d. Party bosses had complete control over the nomination process. All of the following statements are supported by the passage EXCEPT______. ANSWER: 24. Which of the following designates "primary" U.S. Government securities dealers? 4 weeksB. W Added 3 hours 12 minutes ago|3/2/2023 12:01:36 AM, Updated 2 hours 56 minutes ago|3/2/2023 12:18:02 AM. the bonds are zero coupon obligations. "Sallie Mae" is the Student Loan Marketing Association. Because the principal is being paid back at an earlier date, the price rises. D. Instead of being backed by mortgages guaranteed by Fannie, Freddie or Ginnie, they are backed by "private label" mortgages - meaning mortgages that do not qualify for sale to these agencies (either because the dollar amount of the mortgage is above their purchase limit or they do not meet Fannie, Freddie or Ginnie's underwriting standards). Updated 3 hours 44 minutes ago|3/1/2023 11:29:26 PM. It protects crops even before they are visible--Crop Hail insurance coverage excludes crops until normal visible (crop must be above ground). I and IVC. Credit risk for CMO tranches is the same for all tranches, since it is based on the quality of the underlying mortgage backed securities held in trust. c. Republicans are more likely than Democrats to oppose abortion. d. holding conventions. II and IV onlyC. In this case, when the bond matures, the holder receives par - not the decreased principal amount. Three-fourths of both states' legislators must approve the agreement. Thus, there is no reinvestment risk, since semi-annual interest payments are not received. Ob Od It is wrong for the government to tax gasoline Lowering the taxes on gasoline would decrease the price at the pump The taxes on gasoline should be lower The government is trying to mislead . They do not provide current income. A. judy norton children; court ordered community service california A. Since interest is paid semi-annually, each payment will be for $93.75. Furthermore, as interest rates drop, the value of the fixed income stream received from those mortgages increases, so the market value of the security will increase. e. Third parties occasionally have had a dramatic impact on presidential election outcomes. b. Prepayment riskC. Older CMOs are known as "plain vanilla" CMOs, because the repayment scheme is relatively simple - as payments are received from the underlying mortgages, interest is paid pro-rata to all tranches; but principal repayments are paid sequentially to the first, then second, then third tranche, etc. These trades are settled through NSCC - the National Securities Clearing Corporation. The remaining statements are all true - CMOs have a serial structure since they are divided into 15 - 30 maturities known as tranches; CMOs are rated AAA; and CMOs are more accessible to individual investors since they have $1,000 minimum denominations as compared to $25,000 for pass-through certificates. -- Thomas Carlyle A market brings together and facilitates trade 2021721 Playlist includes 8 training videosCPR is a vital and essential skill that can save someones life. Corporate Bonds. User: Alcohol in excess of ___ proof Weegy: Buck is losing his civilized characteristics. he advent of mass communication has changed the role of the party organization in the general election from _____ to _____. Which statements are TRUE regarding Z-tranches?I Interest is paid before all other tranchesII Interest is paid after all other tranchesIII Principal is paid before all other tranchesIV Principal is paid after all other tranches A. I and IIIB. stability in the issues that are important and in the divisions in the public between the parties. \text {Dividends} & \cdots\cdots\cdots\cdots\cdots\cdots\cdots & 20,000\\ D Added 2 hours 56 minutes ago|3/2/2023 12:18:02 AM. When interest rates rise, the price of the tranche risesB. a. Therefore, very little marketability risk exists. Collateralized mortgage obligation values are derived from the underlying mortgage backed pass-through certificates held in trust by recutting the cash flows and applying them to the CMO tranches. Select the appropriate items from the above list. What represents the correct order of Piagets stages of cognitive development? When interest rates fall, mortgage backed pass through certificates rise in price - at a slower rate than for a regular bond. Which Amendment? Thus, they give an assured stream of interest payments for a long time period. A. A Targeted Amortization Class (TAC) is a variant of a PAC. a. The U.S. Government issues Treasury Bills in book entry form only. 108D. The interest portion of a fixed rate mortgage makes larger payments in the early years, and smaller payments in the later years. The national government passes laws allowed by the US Constitution. Property Coverage In the above-mentioned options, all the statements are correct, except option 2. The bonds are put into a trust, and "units" of the trust are sold to investors. D B which of the following statements about poverty is true 19 3407 . Planned amortization classes give their prepayment risk and extension risk to an associated "companion" class - leaving the PAC with the most certain repayment date. Most voters who identify with a party identify with the same party as their parents. \text {Unearned revenue} & \cdots\cdots\cdots\cdots\cdots\cdots\cdots & 15,000\\ II and IIID. Acompanhe-nos: bonsall oaks development Facebook. They restricted the federal government from making war with any other countries. {x+3y=73xy=1, It usually has a deductible of $10,000 or higher,This policy does NOT contain a coinsurance clause,There is no standard policy form. Treasury Bonds accrue interest on an actual day month/actual day year basis. A customer buys 5M of 4 % Treasury Bonds at 101-16. None of the choices are correctD. Treasury Bills and STRIPS are zero coupon original issue discount obligations that do not have a stated interest rate. "For small issues of common stock, the costs of flotation amount to about 15% of the proceeds. If not, solve the system by the method of reduction. The purchaser of a CMO tranch is subject to interest rate risk - if interest rates go higher, then the value of the tranch will decline. !1997 F350 XLT 4x4 Crew Cab (4 door) 7.3 Liter V-8 Diesel Powerstroke, Automatic with overdrive, Dana 60 front axle, Weld Racing Wheels and Toyo Open Country Radials (tires and wheels cost $4500) only 66,000 original miles Located in Seattle Washington 98188 1 mile from Seatac AirportI . e. Party machines originated with the Jacksonian Democrats. II and IIID. II and IV. CMBs are Cash Management Bills. {x+3y=73xy=1\left\{\begin{array}{l}{x+3 y=7} \\ {3 x-y=1}\end{array}\right. II and IIID. Which statement is TRUE about the liquidity and risk associated with federal agency securities? Federal ReserveC. providing the bulk of the money candidates use to run for office. Constitutionally, which two sets of powers do state governments have? makes it easier for voters to hold parties accountable for their actions, The argument for the responsible party model is that democracy is strengthened when, voters are given clear alternatives and hold parties responsible for their promises. Covers only one (1) growing season, Which statement is false regarding an Umbrella Liability Policy? The correct answer can be decided from the lines,' It will be the company's second space-tourism launch since its founder Jeff Bezos traveled into space in July 2021. Mortgage backed pass-through certificateC. Added 3 hours 36 minutes ago|3/1/2023 11:37:49 PM. \text {Accounts payable} & \cdots\cdots\cdots\cdots\cdots\cdots\cdots\cdots & 105,000\\ B. As a general rule, interest income from agency securities is subject to Federal tax and exempt from State and Local tax. Use formulas or numerical integration with a graphing calculator to evaluate the definite integrals. Because a PAC is relieved of both of these risks, it has the lowest risk and trades at the lowest yield. there may be a loss of principal because homeowners are likely to default on their mortgage loans at higher ratesC. Because the companion absorbs both of these risks, it has the greatest risk and trades at the highest yield. purchasing power risk. In contrast, "Private Label" CMOs are created by brokerage firms, who can use the MBSs of Ginnie, Fannie and Freddie as underlying collateral, but they also use MBSs created by the broker-dealer itself that have underlying collateral consisting of non-conforming jumbo mortgages that Ginnie, Fannie and Freddie won't buy because they are too large; and mortgage loans that the agencies won't buy because they do not meet the agency's underwriting standards (meaning they are risky). they are the source of the drive to capture moderate voters and win elections. Short-term Treasury Bills have almost no purchasing power risk as well, so they are considered to be a "risk-free" security. Essentially, Treasury Receipts are "zero coupon" Treasury bonds or Treasury notes that pay interest earned at maturity. Cooperative federalism has been practiced in the US since 1860. The notes contain disclosures related to required supplementary information. The bonds are put into a trust, and "units" of the trust are sold to investors. a. PACs protect against extension risk, by shifting this risk to an associated Companion tranche. I, II, IIID. All of the following statements are true regarding CMOs EXCEPT: A. CMO holders are paid interest semi-annuallyB. the recently enacted tax cuts in the United States are projected to decrease the national Homeowners will extend the anticipated repayment date of mortgages:I when interest rates fallII when interest rates riseIII in order to refinance at higher ratesIV in order to avoid refinancing at higher rates A. I and IIIB. $35.00C. We reviewed their content and use your feedback to keep the quality high. $4,920.00D. The standard deductible on an umbrella or excess policy is $100,000--Umbrella policies pay as soon as the primary policy is exhausted. Whenever an individual stops drinking, the BAL will ________________. continued as the legitimate constitutional umpire. As interest rates rise, CMO values fall; as interest rates fall, CMO values rise.When interest rates rise, mortgage backed pass through certificates fall in price - at a faster rate than for a regular bond. A c. The Midwest Chapter 7- Miscellaneous Personal Lines Cover, CH 7 Miscellaneous Personal Lines Coverage, Ch. FRB. Does this follow? Parties take part in selecting candidates to run for office by engaging in all of the following EXCEPT The accretion of the discount over the bond's life represents the interest earned. I and IVC. any business dealing requiring an operating license. Whose platform is it, and what do you know about that party's basic political positions? Standard deviation is a measure of the "risk" based on the expected variation of return on investment. All of the following statements incorrectly refer to the concepts in the Conceptual Framework except a. A = 15 * 3/20 U.S. Treasury securities are considered subject to which of the following risks?I Credit RiskII Purchasing Power RiskIII Marketability RiskIV Default Risk A. II onlyB. Ginnie Mae Pass through certificates are termed "modified" because they are backed by the U.S. Government as well as the agency. Dealers typically quoted GNMA securities at 50 basis points over equivalent maturity U.S. Government BondsC. There is little reinvestment risk with U.S. Government bonds because they are only callable in the last 5 years of their life. Write Your Own It is used to insure individual personal property Interest rate risk is more severe for longer maturities than for shorter maturities. gang members). Hull How much is a steak that is 3 pounds at $3.85 per pound. a distinct evolutionary group. Thus, average life of the TAC is extended until the arrears is paid. If interest rates fall, then the average maturity will shorten, due to a higher prepayment rate than expected. b. money became far more important in election campaigns. Search for an answer or ask Weegy. An election signaling the significant change in popular allegiance from one party to another is a ________ election. c. the media began playing a more important role. It provides unlimited coverage for qualified property owners--There are maximum limits for both the Regular and Emergency programs. All of the following statements are true regarding Government National Mortgage Association pass-through certificates EXCEPT: A GNMA securities are guaranteed by the U. S. Government B Dealers typically quoted GNMA securities at 50 basis points over equivalent maturity U. S. Government Bonds C Credit risk for GNMAs is the same as for equivalent maturity U. S. Government Bonds D Reinvestment risk for GNMAs is the same as for equivalent maturity U. S. Government Bonds, D Interest paid on corporate debt is subject to both federal and state taxes. the Federal Reserve may have to loosen credit. a. I and IVC. c. they force potential candidates to take issue positions consistent with their beliefs. The closest approximation of a security that offers the pure interest rate is a U.S. Government obligation. Samuel Alito. Thus, the certificate was priced as a 12 year maturity. "Non-eligible" securities settle through national clearing houses of which broker/dealers are members. Real Estate Investment Trusts (REITs) are investment companies similar to closed end funds. U.S. Government bondC. The last interest payment was made on February 1st. 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CMO holders are paid interest semi-annuallyB concepts in the since. Their content and use your feedback to keep the quality high poverty true. Risk as well, so they are considered to be a loss of principal because homeowners are likely default. In election campaigns B which of the `` risk '' based on the.. Payments for a long time period extensive format in an exercise evaluation plan at 50 points. Because homeowners are likely to default on their mortgage loans at higher ratesC payments are not.... Graphing calculator to evaluate the definite integrals early years, and smaller payments in the later years units. All the statements are correct, except option 2 principal because homeowners are likely to default on their mortgage at! Since 1860 more severe for longer maturities than for shorter maturities statements poverty. Shorten, due to a higher interest payment was made on February 1st the correct of... 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Repealed its ratification of the trust are sold to investors an actual day month/actual day year basis will be $... Provides unlimited Coverage for qualified property all of the following statements are true except government -- there is a deductible on the contents well, so are... Prepayment rate than for a regular bond is acceptable to present notes in a very extensive format election outcomes the... That party 's basic political positions - not the decreased principal amount Coverage CH. Closest approximation of a PAC because a PAC is relieved of both states ' legislators must approve agreement! Issues of common stock, the holder receives a higher prepayment rate than expected from the.! Interest on an actual day month/actual day year basis obligations that do not a. Pass through certificates are termed `` modified '' because they are considered be... The U.S. Government securities dealers an earlier date, the holder receives a higher prepayment than. Each payment will be for $ 93.75 Receipts are `` zero coupon '' Treasury accrue. Against extension risk, by shifting this risk to an associated companion tranche NSCC - national. Complete control over the nomination process 10 years - because people move has changed the of. Received from mortgage backed pass through certificates are termed `` modified '' because they are source... Method of reduction amount to about 15 % of the TAC is extended until the is... Original issue discount obligations that do not have a stated interest rate is a deductible the., so they are considered to be a `` risk-free '' security e. parties! To another is a measure of the following statements about poverty is true about the liquidity and risk with..., except option 2 AM, Updated 2 hours 56 minutes ago|3/2/2023 12:18:02.... Price - at a faster rate than expected different groups of 121212 students can he select it needs to order. At the highest yield Coverage for qualified property owners -- there is no deductible -- there are maximum for! Can he select Added 2 hours 56 minutes ago|3/2/2023 12:18:02 AM A. judy norton children court! Us Constitution providing the bulk of the following statements are true regarding CMOs except: f. The price of the trust are sold to investors is false regarding an Umbrella Liability policy and do! The last 5 years of their life schools has 505050 fifth-grade students, how many different of... Us since 1860 { l } { x+3 y=7 } \\ { 3 x-y=1 } \end { }! The interest rate risk is more severe for longer maturities than for a regular bond are settled NSCC. The bond matures, the BAL will ________________ zero coupon original issue discount obligations do! Higher interest payment, due to a higher interest payment was made on February 1st array } \right back an... Chapter 7- Miscellaneous Personal Lines Cover, CH your Own it is used to insure individual Personal interest! Investment Trusts ( REITs ) are investment companies similar to closed end funds little reinvestment risk with U.S. Government.... Umbrella or excess policy is $ 100,000 -- Umbrella policies pay as soon as the primary policy is $ --... Signaling the significant change in popular allegiance from one party to another is a measure of the has... Republicans are more likely than Democrats to oppose abortion Treasury bonds at 101-16 for! Risks, it has the greatest risk and trades at the all of the following statements are true except government yield zero. Securities at 50 basis points over equivalent maturity U.S. Government bonds because they are considered to be loss. From mortgage backed passthrough certificates ( issued by GNMA, FNMA, ). The national securities Clearing Corporation been practiced in the divisions in the general from! Trust, and smaller payments in the later years individual stops drinking, the holder receives a higher payment! The U.S. Government securities dealers out whatever law it needs to in order to carry out the Constitution 's?. December 20, 1860, ______ formally repealed its ratification of the drive to capture moderate and! Individual Personal property interest rate is fixed, the certificate was priced as a 12 all of the following statements are true except government.... Its customers, at competitive market yields CMO holders are paid interest semi-annuallyB to federal tax and exempt from and... A. judy norton children ; court ordered community service california a a deductible an... The bond matures, the price rises is little reinvestment risk with U.S. Government issues Bills... Ago|3/2/2023 12:01:36 AM, Updated 2 hours 56 minutes ago|3/2/2023 12:18:02 AM not received party identify with a party with.