All of the following describe limitations of using option-adjusted spreads (OASs) for valuing mortgage-backed securities (MBSs) except:
　　A. modeling risk is associated with Monte Carlo simulations.
　　B. model requires making adjustments to interest rate paths.
　　C. model assumes a dynamic OAS over time.
　　D. prepayment model influences the model valuation.
　　Answer:C
　　When using OAS to value MBS, the model assumes a constant OAS over time. This is problematic if there is a term structure to the OAS because this is not reflected in the Monte Carlo process.