Higher prepayments have what impact on the effective duration of a mortgage passthrough security? a. They decrease

Question:

Higher prepayments have what impact on the effective duration of a mortgage passthrough security?

a. They decrease effective duration for all maturity mortgages.

b. They increase effective duration for all maturity mortgages.

c. They increase (decrease) effective duration for short (long) maturity mortgages.

d. They increase (decrease) effective duration for long (short) maturity mortgages.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Fundamentals Of Investments Valuation And Management

ISBN: 9781266824012

10th Edition

Authors: Bradford Jordan, Thomas Miller, Steve Dolvin

See More Books

Question Posted: Jan 02, 2024 05:43 AM

See More Questions

2. If the wavelength of the first harmonic is 5.0 m for a pipe open at one end and closed at the other and the temperature of the air is -15 C, answer the following: 50 pts What is the speed of...
Use a graph of the integrand to guess the value of the integral. Then use the methods of this section to prove that your guess is correct. cos x d
KYC's stock price can go up by 15 percent every year, or down by 10 percent. Both outcomes are equally likely. The risk free rate is 5 percent, and the current stock price of KYC is 100. (a) Price a...
In Exercises find the positive values of p for which the series converges. n=1 n
Compute and sketch the step response of thesystem M-1 2x(n - k) v(n)
Determine the moment produced by the force F about point A in terms of the angle ?. Plot the graph of M A versus ?, where 0? ? ? ? 180?. ? 1.5 m F-6kN 6m
El estudiante de posgrado de la Universidad de Chicago se senta preso de la rutina. Hay mucho que hacer en Chicago explica, pero siempre acababa yendo a los mismos cines y restaurantes. Para ayudar a...
In year 0, Javens, Inc. sold machinery with a fair market value of $400,000 to Chris. The machinery's original basis was $317,000 and Javens's accumulated depreciation on the machinery was $50,000,...
Its December 31, 2020, and youre sitting at your desk looking out the window watching the snowflakes fall. Your friends have the day off and have just left to go skiing. You are required to stay at...
For a given mortgage pool, which of the following CMOs based on that pool is most likely to increase in price when market interest rates increase? a. 100/300 PAC bond b. A-tranche sequential CMO c....
Which of the following most accurately measures interest rate sensitivity for mortgage passthrough securities with prepayment risk? a. Static duration b. Effective duration c. Modified duration d....
Fearless Furniture Manufacturing (FFM) has been manufacturing furniture for the home for over 30 years. George Fearless, the owner, has decided he would like to manufacture an executive desk that...
What's your favourite way to promote and build interpersonalwellness? How do you nurture your relationships? How do you build friendships? How do you show your loved ones that you care? Share your...
What is the best way to summary this formation? IMC Communication Objectives Increase from 0% to 75% of Millennials in the Dallas-Fort Worth area, ages 22 - 34, with a four-year college degree,...
Branding is very important to marketing, that is while most businesses focus on brands that attract customer's interest. Store brand is unique to a particular store compared to national brand . A...
Do you think that your score accurately reflects your global mindset? Why or why not? What, if anything, is missing from the assessment? How do you think that having a higher global mindset will help...
Healthcare is an ever-changing industry that requires healthcare organizations to align with those changes or risk being left behind. With the advances being made in technology, every corner seems to...
What is a "jeopardy assessment?" When may this be appropriate? What does such an assessment entitle the IRS to do?
What did Lennox gain by integrating their WMS, TMS, and labor management systems?
Queen Corporation adopts a plan of complete liquidation on January 1 of the current year. The corporation sells the assets listed below to King Corporation during the current year. This sale is...
Peter Martin owned an equity interest in retail hardware stores for a nationwide chain. The eleven stores operate in a single midwestern state under the name Martin Corporation. Peter has been the...
Gertrude, age 67 and widowed, owns 50 acres of land on the Chattahoochee River that she and her husband purchased for $10,000 when they were newlyweds in 1970. The land is near Atlanta and is now...
Estimate the intrinsic value of the stock company ABC. Dividends were just paid at $8 per share and are expected to grow by 5%. You require 20% on this stock given its volatile characteristics. If...
Crane, Inc., a resort management company, is refurbishing one of its hotels at a cost of $6,794,207. Management expects that this will lead to additional cash flows of $1,560,000 for the next six...
Match each of the following transactions with the applicable internal control principle that is being violated

Higher prepayments have what impact on the effective duration of a mortgage passthrough security? a. They decrease

Question:

Step by Step Answer:

The correct answer is c They increase decrease effective duration for short long maturity mortgages ...View the full answer

Fundamentals Of Investments Valuation And Management

Students also viewed these Business questions