Financial Risk Manager Part 1
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How would you describe the typical price behavior of a low premium mortgage pass-through security?
A
It is similar to a U.S. Treasury bond.
B
It is similar to a plain-vanilla corporate bond.
C
When interest rates fall, its price increase would exceed that of a comparable duration U.S. Treasury bond.
D
When interest rates fall, its price increase would lag that of a comparable duration U.S. Treasury bond.