Question: Given a pool of FRMs, we would like to create floater and inverse floater securities from a set amount of pool of mortgages. All else
Given a pool of FRMs, we would like to create floater and inverse floater securities from a set amount of pool of mortgages. All else equal, when we increase the principal allotment to the floater class relative to the inverse floater class, what happens to the maximum cap rate that can be paid to the floater class? Increase Cannot be determined with the information given Decrease Remain the same
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