Question: The following questions relate to credit card receivable-backed securities:
a. What happens to the principal repaid by borrowers in a credit card receivable-backed security during the lockout period?
b. What is the role of the early amortization provision in a credit card receivable-backed security structure?
c. How can the cash flow of a credit card receivable-backed security be altered prior to the principal-amortization period?
d. Why is the monthly payment rate an important measure to examine when considering investing in a credit card receivable-backed security?