Task: Class Definition Understanding (ontology: Business_Finance/Financial_Industry_Business_Ontology)

Which of the following definitions best describes 'prepayment speed'?

A. estimated per-month percentage of mortgages in an MBS pool that will be paid off early
B. Public Securities Association (PSA) speed used for the underlying collateral for cash-flow calculations in the "up 300" scenario.
C. Sensitivity of the price for one basis point change in yield, defined as the difference in price given 1 bp change in yield.
D. estimated rate at which a debt or part of a debt is paid off ahead of schedule

Answer: estimated rate at which a debt or part of a debt is paid off ahead of schedule