Question
FNMA inc. has direct holdings of 30-year fixed-rate mortgages financed by 3 to 5-year agency securities sold to the public. 1. Explain the type of
FNMA inc. has direct holdings of 30-year fixed-rate mortgages financed by 3 to 5-year agency securities sold to the public.
1. Explain the type of risks that FNMA faces
2. What kind of interest rate swap could FNMA use to limit their interest rate risk? Explain.
3. What kind of interest rate option could FNMA use to limit the interest rate risk? Explain how this would work. Explain how a collar could also be used.
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Public Finance A Contemporary Application Of Theory To Policy
Authors: David N Hyman
12th Edition
0357442156, 978-0357442159
