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?

Answer rating: 100% (QA)

1 Benchmark Option in a PassThrough The benchmark option in a passthrough refers to the prepayment o... View the full answer