Question
1.You buy a Principal Only Strip. The price at the time of purchase reflects a 12% expected annual prepayment rate. One hour after your purchase,
1.You buy a Principal Only Strip. The price at the time of purchase reflects a 12% expected annual prepayment rate. One hour after your purchase, the expected annual prepayment rate falls to 6%. The value of your security should?
2.You buy an Interest Only Strip. The price at the time of purchase reflects a 12% expected annual prepayment rate. One hour after your purchase, the expected annual prepayment rate falls to 6%. The value of your security should?
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Public Finance And Public Policy
Authors: Jonathan Gruber
6th Edition
1319105254, 9781319105259
