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What is a mortgage pay-through bond (MPTB)? How does it resemble a mortgage-backed bond (MBB)? How does it differ?
What is a mortgage pay-through bond (MPTB)? How does it resemble a mortgage-backed bond (MBB)? How does it differ?
Solutions
Expert Solution
MPTBs are issued against mortgage pools and, like MPTs, cash flows from the pool are passed through to security holders. However, unlike an MPT, this security is a bond and not an undivided equity ownership interest in a mortgage pool. Like the MBB, the MPTB is a debt obligation of the issuer, who retains ownership of the mortgage pool.
Raffay answered 2 years agoRelated Solutions
What is the difference between a “mortgage” bond and a “mortgage-backed” bond?
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What are mortgage-backed securities, why were they developed, what types of mortgage backed securities are there,...
What are mortgage-backed securities, why were they developed, what
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work?
a. What are the pros and cons of asset-backed securities such as mortgage-backed securities to the...
a. What are the pros and cons of asset-backed securities such
as mortgage-backed
securities to the retail or institutional investors?
b. What are the roles played by various financial
institution(s)?
c. Mutual funds have been gaining popularity among investors.
From the investors’ point of view, illustrate why it is usually a
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What is a mortgage-backed security, how it functions, and how it contributed to the financial crisis...
What is a mortgage-backed security, how it functions, and how it
contributed to the financial crisis of 2007 & 2009. (1000
words)
Explain what it is a mortgage backed security (MBS) and how it is functions. Discuss how...
Explain what it is a mortgage backed security (MBS)
and how it is functions. Discuss how these securities caused 2008
USA financial crisis?
A 10-year maturity mortgage-backed bond is issued. The bond is a zero coupon bond that promises...
A 10-year maturity mortgage-backed bond is issued. The bond is
a zero coupon bond that promises to pay $10,000 (par) after 10
years. At issue, bond market investors require a 15 percent
interest rate on the bond. What is the initial price on the bond?
(A)
$2,252
$2,472
$8,696
$10,000
Answer is A but I don't know how to do it. Please explain using
financial calculator step.
How do mortgage backed securities work? Why did banks think that selling mortgage backed securities would...
How do mortgage backed securities work? Why did banks think that
selling mortgage backed securities would relieve them of the risks
involved with mortgage lending? How did the banks indirectly come
to once again be exposed to mortgage lending risk? What happened to
bank reserves during the mortgage debt crisis? How did the Federal
Reserve respond; and, in hindsight, do you consider the Fed's
response to be appropriate and corrective? Explain why or why
not?
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Introduction to Mortgage Mathematics and Mortgage-Backed
Securities
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MBS that has just been created (so the 'seasoning' of the
pass-through is equal to 0). The underlying pool of mortgages each
has a maturity of 20 years and an annual mortgage coupon rate of
6%. The pass-through rate of the mortgage pool is 5%. Assuming a
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interest paid to the pass-through investors? Submission...
Introduction to Mortgage Mathematics and Mortgage-Backed Securities 2 (Mortgage Pass-Throughs) Consider a $400 million pass-through MBS...
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6%. The pass-through rate of the mortgage pool is 5%. Assuming a
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Mortgage-backed bonds
Collateralized mortgage obligations (CMO)
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security?
2. Which security above may have a varying exposure to
defaults?
3. Which security above is secured by the
mortgages?
4. Three tranches of a CMO are established. Tranche A
will receive all payments until the monthly coupon payment is
satisfied. Tranche B will receive payments ONLY after Tranche A’s
coupon...
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