1. a) Do you expect any changes in mortgage-backed security pricing if the pass-through security was not...
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Question:
1.
a) Do you expect any changes in mortgage-backed security pricing if the pass-through security was not fully amortised?
b) What is the present value of a twelve million pool of ten-year mortgages with an 8 per cent monthly mortgage coupon per annum if market rates are seven per cent?
Assume that the pass-through security is fully amortised.The total mortgage-backed security fee is assumed to be 500 basis points.
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