标题: Is this an error? mock pm [打印本页] 作者: hassan 时间: 2013-4-4 16:43 标题: Is this an error? mock pm
question 8.
Do they mean “incorrect” in the question instead of “correct”?
THanks作者: Kiakaha 时间: 2013-4-4 16:47
Really? But the answer says:
Non-amortizing assets, prior to the lockout or revolving period, principal repayments can
be either paid out to security holders or reinvested in additional loans.
where as the statement in the question is missing the “reinvested” part.
Maybe I’m just not getting the question. Can someone please explain to me why the other two statements related to the question are wrong?
Thanks!!作者: tarik64 时间: 2013-4-4 16:49
Same here I think it was an error, because ok: in a non amortizing mbs the minimum payment may not be even the interest, so that one is incorrect, but the other two are correct statements.
The one about collateral, it doesnt change for an amortizing security (just for defaults or when payment is finished for a bond) but if it is for this reason it would be a very very very tricky answer
The principal payments is all correct作者: thisisbrianly 时间: 2013-4-4 16:51
hey guys,
so what shuld be the question and what should be the answer then? I would say as frangoya said, the question should be asking for the incorretc statement…
Thanks,
M.作者: clearlycanadian 时间: 2013-4-4 16:53
Amortizing payment: Principal and interest
Non amortizing: Interest only
Should be B作者: Howd 时间: 2013-4-4 16:55
so why A and C are worng then?
M.作者: invic 时间: 2013-4-4 16:56
Collateral for amortizing assets can change due to prepayments.
Lockout periods aren’t restricted only to non amortizing collateral. Your mortgage can have a prepayment lockout if the lender wants to structure it that way.
