SIE practice questioneasyMortgage-Backed Securities
Which risk is a primary concern for investors in a GNMA (Ginnie Mae) pass-through security?
- APolitical risk
- BTax risk
- CCurrency risk
- DPrepayment risk✓ Correct answer
Explanation
Why D — Prepayment risk
GNMA investors face prepayment risk if homeowners pay off mortgages early. Tax, currency, and political risk are not primary concerns for GNMAs.
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