Question: please answer with excel QUESTION 14-PAC/SUPPORT BOND QUESTIONS (a) What is the major factor that drives prepayment risk? (b) Can a CMO be structured to

please answer with excel

QUESTION 14-PAC/SUPPORT BOND QUESTIONS (a) What is the major factor that drives prepayment risk? (b) Can a CMO be structured to eliminate prepayment risk from the residential mortgages? (c) In a transaction that consists of PAC bonds and support bonds, list the following in the order of the variability of their average lives (from the greatest amount of vagin bilty to the least): () the collateral: (the PAC bond and (1) the support bonds. (d) Explain your answer in (c) above. (e) is modified duration a good estimate for the percentage price change for residential mortgage securities? Why? How can it be improved? (1) is prepayment risk significant for CMBS transactions? Why or why not

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