Question
You are the investor in an IO security. Suppose the projected prepayment rates decrease after you purchased the IO strip and are lower than forecasted
You are the investor in an IO security. Suppose the projected prepayment rates decrease after you purchased the IO strip and are lower than forecasted at the time of purchase. Holding all else equal, what will happen to the value of your investment?
| Increase | ||
| Decrease | ||
| Stay the same | ||
| Can not be determined |
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Introduction To Finance Markets Investments And Financial Management
Authors: Ronald W. Melicher, Edgar A. Norton
14th Edition
0470561076, 9780470561072
