Cash flow yield, Financial Management

In structured products like mortgage-backed and assets-backed securities, the cash flows include both principal repayment and interest. The complication arises when individual borrowers repay their loans before the maturity date. To incorporate this prepayment factor into the expected cashflows from a security, a rate at which prepayments will occur is assumed. Once the cash flows are projected based on the assumed prepayment rate, cash flow yield is obtained. Cash flow yield may be defined as the interest rate that will make the present value of the projected cash flows which is based on assumed prepayments equal to the price plus the accrued interest.

Posted Date: 9/10/2012 2:00:01 AM | Location : United States







Related Discussions:- Cash flow yield, Assignment Help, Ask Question on Cash flow yield, Get Answer, Expert's Help, Cash flow yield Discussions

Write discussion on Cash flow yield
Your posts are moderated
Related Questions
IMPORTANT FACTORS FORĀ  SUCCESSFUL BUDGETARY CONTROL 1. Clearly defined organization structure. 2. Top management support. 3. Reporting of deviations 4. Efficient acco

Define the term in brief -Called-up share capital Called-up share capital that you may find in some of balance sheets. It refers to that part of subscribed capital, which share

Pay Back Period (PBP) : This is the most popular method employed by industrial practitioners for ranking investment projects. This is described as the "period required for a pr

the nu-nu brothers inc. (NNBI) has the following capital structure,

QUESTION (a) (i) Describe briefly two potential E-Banking risks that may have an adverse impact on banks. (ii) Outline some measures to control these two risks. (b) Outli


what business organization do you preffer ? service concern,trading concern or manufacturing concern

Q. Describe Financial Management. Discuss the scope and nature of financial management. What role could the financial manager play in a modern organization? Describe the scope o

Determine the Preference Shares - Equity Instruments Sandwiched between equity share holders anddebt holders, preference share holders have promise of an assured dividend from

Explain the implications of purchasing power parity for operating exposure. Answer: Determine if the exchange rate changes are matched by the inflation rate differential among