Many companies have developed an asset/liability management approach that is founded on
understanding product liabilities. Mortgages meet the primary objective of maintaining:
Answer:C
Question — (Single Choice)
___________ is an amount of money, loaned at interest for a specified term, secured by real estate
and by its improvements such as buildings and infrastructure. This form of instrument itself varies by
jurisdiction, but the debt is always evidenced by an accompanying promissory note.
Answer:A
Question — (Single Choice)
Prepayment of a conventional mortgage loan, prior to its specified maturity, is discouraged through
the general market acceptance of significant prepayment penalties. Often these penalties are
calculated so that when prevailing market interest rates are:
Answer:A
Question — (Single Choice)
These are securities whose underlying assets consist of commercial mortgage loans. The commercial
loans are pooled, which brings diversification and liquidity to the asset class.
What are these?
Answer:B
Question — (Single Choice)
There are many different sources of CMBS. Conduits and aggregate pools generally consist of loans
newly originated, purchased or held by investment bankers until the pool is large enough for an
efficient execution. Government agencies such as the Federal National Mortgage Association (FNMA)
and the Federal Home Loan Mortgage Corp. (FHLMC) are important sources of:
Answer:A
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