Following the investment policy meeting, Peter Drummond sends an e-mail to the other partners regarding key points discussed in the meeting. In the section of his e-mail about payment structures, Drummond makes two points:
A. Points 1 and 2 are correct. B. Point 2 is correct and Point 1 is incorrect. C. Point 1 is correct and Point 2 is incorrect.
Point 1 is correct – under a bullet payment structure, investors receive the total principal amount in a single sum. Point 2 is incorrect - prepayment risk does not apply to individual non-amortizing loans because they have no scheduled principal payments
