What is the bond-equivalent yield if the monthly cash flow yield is 0.7%?
Answer to relevant QuestionsAnswer the below questions. (b) What are contraction risk and extension risk? (c)Why would a pass-through with a WAM of 350 months be an unattractive investment for a savings and loan association? Describe the cash flow of a mortgage pass-through security. Suppose that a savings and loan association has decided to invest in mortgage-backed securities and is considering the following two securities: (i) a Freddie Mac pass-through security with a WAM of 340 months or (ii) a PAC ...What is the difference between a REMIC and a CMO? What types of investors would be attracted to an accrual bond?
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