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11) Suppose that the following values for a RMBS are correct for each assumption:^ PSA Assumption* Value of Security* 192 112.10 194 111.80e 200* 111.20
11) Suppose that the following values for a RMBS are correct for each assumption:^ PSA Assumption* Value of Security* 192 112.10 194 111.80e 200* 111.20 202e 111.05* 210 110.70 Assuming that the value of the security in the market is 111.80 based on 194 PSA.* a) What is the prepayment sensitivity of this security?* b) What does that mean? Explain in one paragraph.* 11) Suppose that the following values for a RMBS are correct for each assumption:^ PSA Assumption* Value of Security* 192 112.10 194 111.80e 200* 111.20 202e 111.05* 210 110.70 Assuming that the value of the security in the market is 111.80 based on 194 PSA.* a) What is the prepayment sensitivity of this security?* b) What does that mean? Explain in one paragraph.*
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