The graph below represents the estimated price$/$yield relationship for two mortgage$-$backed securities$,$ taking into account expected prepayment and default behavior. Both securities are derivatives of a pool of underlying fixed$-$rate mortgages, each with a final maturity of $15$ years and that can be prepaid without penalty at any time.

A$.$ Which is the interest only $(IO)?$

a$.$ MBS$1$

b$.$ MBS$2$

B$.$ Which of these securities has a negative effective duration when interest rate is at $6\%?$

a$.$ MBS$1$

b$.$ MBS$2$

C$.$Which of these secruities has a negative convexity when interest rate is at $6\%?$

a$.$ MBS$1$

b$.$ MBS$2$