Which of the following statements concerning mortgage backed securities are correct?
I. They are secured by a pool of residential mortgages.
II. A portion of the income stream is a non-taxable return of capital.
III. They are backed by the full faith and credit of the U.S. government.
IV. Their maturity depends on prepayments of the mortgages in the pool.
A) I and III only
B) I and IV only
C) II, III and IV only
D) I, II and IV only
Answer: D
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