Cash flow yield, Financial Management

Assignment Help:

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.


Related Discussions:- Cash flow yield

Board of directors, Q. Board of Directors Board of Directors - Individu...

Q. Board of Directors Board of Directors - Individuals responsible for overseeing the affairs of an entity including the election of its officers. Board of a CORPORATION which

Explain about pay back method, Q. Explain about Pay Back Method? Pay Ba...

Q. Explain about Pay Back Method? Pay Back Method (PB) :- The payback process is the simplest method. This method computed the number of years required to pay back the original

Determination of spread, Determination of spread Daily interest rate = ...

Determination of spread Daily interest rate = 5.11/ 365 = 0.014% per day Variance of cash flows = 1000 × 1000 = $1000000 per day Transaction cost = $18 per transaction

Define the common pattern of cash flows, What is the common pattern of cash...

What is the common pattern of cash flows for a share of preferred stock? How does the market define the value of a share of preferred stock, specified these promised cash flows?

Explain continuous compounding benefit an investor, How does continuous com...

How does continuous compounding benefit an investor? The influence of increasing the number of compounding periods every year is to increase the future value of the investment. Th

State the concept of icq, ICQ's designed to: Identify possible area...

ICQ's designed to: Identify possible areas of weakness. Discover existence of internal controls. Questions are framed to highlight situations where: NO su

Written report on company, I have a assignment of financial accounting It...

I have a assignment of financial accounting Its a report on company Assignment length 2000 words

Example on walters dividend model, Q. Example on Walters dividend model? ...

Q. Example on Walters dividend model? Example: - The following information is obtainable in respect of a firm: Capitalisation Rate (Ke)                     = 10% Earning

find the worst case npv and probability, Question 1 What are the tota...

Question 1 What are the total cash inflows for project A? Discount rate (%)                      NPV of A (Rs.) 0

Challenges facing by the finance manager, FUNCTIONS / RESPONSIBILITIES / CH...

FUNCTIONS / RESPONSIBILITIES / CHALLENGES FACING THE FINANCE MANAGER Today's finance manager is facing a lot of challenges, which are the direct result of the dynamic growth in

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd