Question

Suppose you are told that the cash flow yield of a pass-through security is 9% and that you are seeking to invest in a security with a yield greater than 8.8%.Answer the below questions.
(a) What additional information would you need to know before you might invest in this pass-through security?
(b) What are the limitations of the cash flow yield for assessing the potential return from investing in a RMBS?


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  • CreatedAugust 22, 2015
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