Answer Happy

Economists forecast that market yields are expected to fall as
inflation expectations decline.
If Treasury yields decline, what would happen to MBS
pass-through securities?
Group of answer choices
MBS prepayment speed would
[ Choose
]
increase
contraction risk
price depreciation
decrease
price appreciation
extension
risk not
enough information to answer
MBS duration would
[ Choose
]
increase
contraction risk
price depreciation
decrease
price appreciation
extension
risk not
enough information to answer
Price [_____] would be limited due to negative convexity.
[ Choose
]
increase
contraction risk
price depreciation
decrease
price appreciation
extension
risk not
enough information to answer
We call this [_____] risk.
[ Choose
]
increase
contraction risk
price depreciation
decrease
price appreciation
extension
risk not
enough information to answer