10. The chapter refers to hedging against the interest rate shifts that can motivate borrowers to refinance...
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10. The chapter refers to hedging against the interest rate shifts that can motivate borrowers to refinance certain types of loans (strategic prepayment). How can a portfolio manager use hedging to mitigate the portfolio impacts of strategic prepayment in an environment of declining interest rates? What are the limitations of hedging under those circumstances? Where possible, illustrate your argument with a numerical example.
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Related Book For 
Elements Of Structured Finance
ISBN: 9780195179989
1st Edition
Authors: Ann Rutledge, Sylvain Raynes
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