Please elaborate whether the statement is right or wrong with reasons.

8. Original Loan-to-Value ratio (LTV) is preferred to current LTV to be used to assess the

likelihood that a seasoned mortgage will default.

9. The PSA prepayment benchmark is a model for forecasting prepayments for a pass

through security.

10. For an interest-rate model to be useful, the drift term has to be a constant regardless of

whether it is a positive, zero, or negative number.