Question: Suppose that a tranche from which an inverse floater is
Suppose that a tranche from which an inverse floater is created has an average life of five years. What will the average life of the inverse floaterbe?
Relevant QuestionsThis quotation is taken from a 1991 issue of BondWeek: First Interstate Bank of Texas will look into buying several different types of collateralized mortgage obligation tranches when it starts up its buy program sometime ...Suppose that for a securitization with a shifting interest mechanism you are given the following information for some month: subordinate interest = 25% shifting interest percentage = 85% regularly scheduled principal payment ...Suppose that the loans in the collateral pool for a nonagency RMBS deal have a floating rate. What is the risk associated with issued fixed-rate bond classes? Answer the below questions. a. What is the difference between credit tranching and prepayment tranching? b. Why would there be both types of tranching in a nonagency deal but only one type of tranching in an agency deal? Answer the below questions. a. How does a single-borrower/multiproperty deal differ from a conduit deal? b. What is meant by a fusion conduit deal?
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