Suppose that for the first four years of a CMO, prepayments are well within the initial PAC

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Suppose that for the first four years of a CMO, prepayments are well within the initial PAC collar. What will happen to the effective upper collar?

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Bond Markets Analysis and Strategies

ISBN: 978-0133796773

9th edition

Authors: Frank J.Fabozzi

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Question Posted: Aug 22, 2015 07:34 AM

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Suppose that for the first four years of a CMO, prepayments are well within the initial PAC

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If the prepayments are well within the initial PAC collar this means that there are more bodyguards ie support bonds around than was expected when the ...View the full answer

Bond Markets Analysis and Strategies

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