Semper Augustus
New member
- Jun 18, 2026
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I am no native speaker, and I am a bit confused about the meaning of “to account for”
In Schweser exam book 2 there is the following affirmation, and we basically need to comment on it :
“the Nominal spread does not account for prepayment risk”(in MBS).
My understanding of “to account for” was:” to take into consideration”.
So my answer was “wrong” (since Nominal spread includes the compensation for prepayment risk, we just don’t know the portion of it which is prepayment risk, this is why we have the OAS)
Schweser says the affirmation is true.
Am I mistaking “to account for”, i.e. to explain/quantify, for “to take into account”, i.e. to “take into consideration” ?
Txs.
In Schweser exam book 2 there is the following affirmation, and we basically need to comment on it :
“the Nominal spread does not account for prepayment risk”(in MBS).
My understanding of “to account for” was:” to take into consideration”.
So my answer was “wrong” (since Nominal spread includes the compensation for prepayment risk, we just don’t know the portion of it which is prepayment risk, this is why we have the OAS)
Schweser says the affirmation is true.
Am I mistaking “to account for”, i.e. to explain/quantify, for “to take into account”, i.e. to “take into consideration” ?
Txs.