6. The delay in passing payments through to investors from the mortgage borrowers lowers the yield slightly for any given price because the cash flows are pushed out into the future. Different prepayment speeds do not change the yield if a bond is purchased at the parity price (slightly below 100), which adjusts par for the payment delay.

..................Content has been hidden....................

You can't read the all page of ebook, please click here login for view all page.
Reset
54.163.221.133