An investor purchases Fannie Mae residential mortgage-backed securities (RMBS) and pays
USD 500,000. Compared to corporate bond investments, which type of risk
is this investor most likely susceptible to?
a) Liquidity risk
b) Reinvestment risk
c) Prepayment risk

An investor purchases Fannie Mae residential mortgage-backed securit.pdf

  • 1.
    An investor purchasesFannie Mae residential mortgage-backed securities (RMBS) and pays USD 500,000. Compared to corporate bond investments, which type of risk is this investor most likely susceptible to? a) Liquidity risk b) Reinvestment risk c) Prepayment risk