FRM II-MR 17

anbu.edu
Finance Junkie
Posts: 205
Joined: Mon Feb 04, 2013 3:35 pm

FRM II-MR 17

Postby anbu.edu » Mon Oct 06, 2014 6:04 pm

Principal-only strips are:
A) sold at par.
B) sold at a considerable discount to par.
C) sold at a considerable premium to par.
D) could be sold at a discount or a premium, depending on economic conditions.
Your answer: C was incorrect. The correct answer was B) sold at a considerable discount to par.
Principal-only strips are sold at a considerable discount to par.

Is this explanation correct

edupristine
Finance Junkie
Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

FRM II-MR 17

Postby edupristine » Tue Oct 07, 2014 6:59 am

Its true that PO strips are always sold at a considerable discount (based on the interest rates or prepayment speeds)from face value or par value.


Return to “FRM Part II”



cron

Disclaimer

Global Association of Risk Professionals, Inc. (GARP®) does not endorse, promote, review or warrant the accuracy of the products or services offered by EduPristine for FRM® related information, nor does it endorse any pass rates claimed by the provider. Further, GARP® is not responsible for any fees or costs paid by the user to EduPristine nor is GARP® responsible for any fees or costs of any person or entity providing any services to EduPristine Study Program. FRM®, GARP® and Global Association of Risk Professionals®, are trademarks owned by the Global Association of Risk Professionals, Inc

CFA Institute does not endorse, promote, or warrant the accuracy or quality of the products or services offered by EduPristine. CFA Institute, CFA®, Claritas® and Chartered Financial Analyst® are trademarks owned by CFA Institute.

Utmost care has been taken to ensure that there is no copyright violation or infringement in any of our content. Still, in case you feel that there is any copyright violation of any kind please send a mail to abuse@edupristine.com and we will rectify it.