AIWMI Exam CCRA-L2 Topic 1 Question 96 Discussion

Actual exam question for AIWMI's CCRA-L2 exam

Question #: 96
Topic #: 1

Statement 1: The Yields on the MBS PTCs are normally higher than the yields on the corporate bonds of similar ratings.

Statement 2: The reason for difference in yields on the corporate bonds and similarly rated PTCs is on account of the optionality in the PTC, the unfamiliarity of the structure and uncertainties in respect of legal and structural issues.

Which of the above statements is correct?

ANone of the statements

BBoth the statements

COnly Statement 2 is correct

DOnly Statement 1 is correct

Show Suggested Answer

Suggested Answer: D

by Stevie at Sep 08, 2024, 02:31 PM

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Chaya

2 months ago

Wait, wait, wait. Are we supposed to be learning finance or playing a guessing game? This question sounds like it was written by someone who's been watching too many Wall Street movies. I'm going with A, just to keep them on their toes.

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Penney

1 months ago

C) Only Statement 2 is correct

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Douglass

2 months ago

B) Both the statements

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Marti

2 months ago

A) None of the statements

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Shizue

2 months ago

I think Statement 1 is correct because MBS PTCs do tend to have higher yields.

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Graciela

2 months ago

I agree with Quentin, Statement 2 makes more sense to me.

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Quentin

2 months ago

I disagree, I believe only Statement 2 is correct.

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Rickie

2 months ago

Dude, this is a total gimme. The answer is clearly D. I mean, who doesn't know that MBS PTCs have higher yields than corporate bonds? It's like, finance 101 or something.

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King

1 months ago

So, we can confidently say that only Statement 1 is correct.

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Yvonne

1 months ago

Exactly, the yields on MBS PTCs are normally higher due to the optionality and uncertainties involved.

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Laurel

2 months ago

Definitely, Statement 1 is the correct one here.

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Werner

2 months ago

Yeah, it's basic finance knowledge. Statement 1 is correct.

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Lizette

2 months ago

Yeah, it's basic knowledge in finance. Statement 1 is correct.

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Emilio

2 months ago

I agree, the answer is clearly D. MBS PTCs do have higher yields than corporate bonds.

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Stephanie

2 months ago

I agree, the answer is clearly D. MBS PTCs do have higher yields than corporate bonds.

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Shenika

2 months ago

I think both statements are correct.

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Tegan

3 months ago

Hmm, I dunno. I'm leaning towards B. Both statements sound reasonable to me. Although, if I had to pick one, I'd go with Statement 2. The optionality and uncertainty factors seem like a pretty good explanation for the yield difference.

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Pete

1 months ago

I would go with Statement 2 as well. The optionality and uncertainties do play a role in yield differences.

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Becky

1 months ago

I'm not sure, but I think Statement 2 is the correct one.

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Shasta

1 months ago

Yeah, I agree. But Statement 2 seems more convincing to me.

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Alise

2 months ago

I think both statements make sense.

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Cheryl

3 months ago

I'm pretty sure the answer is C. Statement 2 makes a lot of sense, what with the optionality and all that structural stuff. The corporate bonds are just so straightforward, you know?

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Sylvie

3 months ago

Yeah, the optionality and uncertainties in PTCs definitely play a role in the higher yields compared to corporate bonds.

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Miesha

3 months ago

I think you're right, Statement 2 does seem to explain the difference in yields between the two.

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