Question: Using the MBS collateral program: a. Determine the values for the following yield analysis matrix for the PO and IO strip MBSs in Question 23.

Using the MBS collateral program:

a. Determine the values for the following yield analysis matrix for the PO and IO strip MBSs in Question 23. PSA/Discount Rate 50 PO Value 50 IO Value 150 PO Value 5%

b. Given PSA speeds increase as rates decrease, determine the values for the IO strip MBS for the following discount rate and PSA pairs. 6% 7% 8% 150 IO Value

c. Comment on the interest rate and value relation you observe.

PSA/Discount Rate 50 PO Value 50 IO Value 150 PO Value 5% 6% 7% 8% 150 IO Value

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