What is the S-curve for prepayments? Explain the reason for the shape.
Answer to relevant QuestionsWhat is a mortgage pass-through security? Answer the below questions. (a) Distinguish between a TBA and specified pool trade. (b) What delivery options are granted to the seller in a TBA trade? What are the different types of agency pass-through securities? Suppose that $1 billion of pass-throughs is used to create a CMO structure with a PAC bond with a par value of $700 million (PAC I), a support bond with a schedule (PAC II) with a par value of $100 million, and a support ...Suppose that 8% coupon pass-throughs are stripped into two classes. Class X-1 receives 75% of the principal and 10% of the interest. Class X-2 receives 25% of the principal and 90% of the interest. Answer the below ...
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