Question
A cash flow for a pass-through typically is based on some prepayment benchmark Option. Describe the benchmark Option. What does a conditional prepayment rate of
A cash flow for a pass-through typically is based on some prepayment benchmark Option. Describe the benchmark Option. What does a conditional prepayment rate of 8% mean? What does 150 PSA mean? How does a CMO alter the cash flow from mortgages so as to shift the prepayment risk across various classes of bondholders?
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Step: 1
1 Benchmark Option in a PassThrough The benchmark option in a passthrough refers to the prepayment o...
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Foundations Of Financial Markets And Institutions
Authors: Frank J Fabozzi, Franco G Modigliani, Frank J Jones
4th Edition
0136135315, 978-0136135319
