Suppose you are told that the cash flow yield of a pass-through security is 9% and that
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(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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a To determine your chances of actually getting an 88 return you would want to know the types of securities backing the passthrough the safety of the ...View the full answer
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