Episode
Series 7 Exam Prep 28, Mortgage-Backed Securities and CMOs
- Podcast
- Open Exam Prep
- Published
- Jul 5, 2026
- Duration seconds
- 306
- Processing state
not_requested
Actions
POST https://stenobird.com/v1/public/podcasts/open-exam-prep-7140559/episodes/series-7-exam-prep-28-mortgage-backed-securities-and-cmos/transcription-requests
Idempotently request low-priority transcript generation for this episode.GET https://stenobird.com/podcast/open-exam-prep-7140559/series-7-exam-prep-28-mortgage-backed-securities-and-cmos.md
Read the agent-friendly Markdown representation of this episode resource.
Summary
This podcast is made by Ran Chen, who holds an EA license, Insurance and Securities licenses (Series 6, 63, 65), and the CFP® designation. He is passionate about opening access to high-quality exam preparation resources and helping learners prepare more effectively for professional certification exams. In this episode you will learn: - How mortgage-backed securities pass through both principal and interest payments monthly. - Why falling interest rates lead to prepayment risk, a form of reinvestment risk. - Why rising interest rates cause extension risk, locking investors into lower yields for longer. - How PAC and Support tranches in a CMO redistribute prepayment and extension risk. - The inverse relationship between interest rates and the value of Interest-Only (IO) strips, a common exam trap. For more free exam prep tools, practice questions, and AI-powered explanations, visit https://open-exam-prep.com/ or YouTube Channel: https://www.youtube.com/@Open-exam-prep