Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Agency Mortgage-Backed Securities (AMBS) are securities that are backed by the mortgage loans. These securities include mortgage passthrough securities, stripped mortgage-backed securities and Collateralized Mortgage Obligations (CMOs).
Mortgage securities are created when a mortgage provider, such as a savings association, commercial bank or mortgage company, sells its residential loans to a federally sponsored credit agency or a private institution. The agency then assembles these mortgages and issues certificates to investors with underlying residential or mortgage loans as collateral. These certificates are called mortgage pass through securities because when the residential house property owner pays his monthly mortgage payment, such payment is 'passedthrough' to the mortgage security holder as interest and return of principal on a monthly basis. In addition to 'mortgage passthrough securities', there exists another type called 'collateralized mortgage obligations' or 'mortgage derivatives.' The latter is said to be more complicated when compared to that of the former one.
Unlike a mortgage passthrough, in which all investors participate proportionately in the net cash flows from the mortgage collateral, in a CMO different bond classes are issued. These bonds called tranches participate in different components of the net cash flows. The tranches carry their own risk characteristics and maturity range. This helps investors to select a bond offering the characteristics, which most closely meet their needs.
The CMO structure offers issuers a flexible tool with which to design tranches to meet investor needs and respond to market conditions. There is a wide range of CMO tranches designed to reduce an investor's exposure to prepayment risk. The tranche types are defined according to general characteristics - a few of the major ones are sequential-pay tranches, planned amortization class (pac) tranches, support or companion tranches, accrual bonds (Z bonds), floating-rate tranches, etc.
What is the meaning of Breakeven point?
Using an appropriate 'factor model', assess (a) the performance of the management in creating value for shareholders and (b) the extent of the foreign exchange exposure of a FTSE10
Explain Hard capital rationing and Soft capital rationing The NPV decision rule to admit all projects with a positive net present value requires the existence of a perfect cap
What are the main classes of institutions that issue bonds in the USA? There are three major classes of institutions which issue bonds in the USA: national governments, local g
cost of capital, Financial Management The Nu-Nu Brothers Inc. (NNBI) has the following capital structure, which it considers to be optional: Debt 25% Preferred Stock 15% Common Equ
X company sells on terms of 2/10, net 40. Gross sales last year were $4.5 million and accounts receivable averaged $ 437,500. Half of X''s customers paid on day 10 and took discoun
Is there an optimal capital structure? What is it and how can it be calculated? There is no optimal capital structure. Capital structure is a variable which depends on the incl
Bridge Financing A type of short-term financing used to cover an organization short-term want; a loan that is expected to be repaid relatively fast.
Principal repayment before the scheduled date is called a prepayment. Every individual borrower normally has the option to pay off all or part of their loan
VK Ltd a multi-product Company, furnishes you the following data relating to theyear 2000.First Half of the year Second Half of the yearSales Rs. 45,000 Rs. 50,000 Total Cost Rs. 4
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd