(Answered) George smith is an analyst in the risk management

Finance

George Smith is an analyst in the risk management department and he is reviewing a pool of mortgages. Prepayment risk introduces complexity to the valuation of mortgages. Which of the following factors are generally considered to affect prepayment risk for a mortgage?

I. Changes to interest rates

II. Age of the mortgage

III. Season of the year

IV. Age of the home

V. Amount of principal outstanding

A. I, II, and V

B. I, II, III, and V

C. I, II, IV, and V

D. III and IV

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