Explain Subprime Mortgage-Backed Securities?

Q: What does a bond issue's "call" feature entail? What effect does the call feature have on bond…

A: This question deals with the "call" feature of a bond issuance entails and the call feature's effect…

Q: What is a mortgage pay-through bond (MPTB)?

A: Mortgage Pay-through bond: MPTBs (Mortgage Pay-through bonds) are delivered in contradiction of…

Q: A CDO is a debt security collateralized by debt obligations, such as residential and commercial…

A: The question is asking whether a Collateralized Debt Obligation (CDO) is a type of debt security…

Q: What effect does collateral have on a bond's interest rate? What effect does subordination have on a…

A: There are various factors that impact a bond's price. We discount back the future cash flows of a…

Q: in layman's terms, what is the diff. between a mortgage backed security and a credit default swap?

A: The borrowings made for purchasing fixed-assets like land, property, home and apartments is…

Q: Why is the discount and premium on bond issues amortized?

A: The bonds can be issued at premium or discount on the basis of market rate of similar bonds.

Q: How is the present value of a bond calculated?

A:

Q: What ratios are likely to be of greatest interest to the banker or trade creditor? To the…

A: The objective of the question is to identify the financial ratios that are of greatest interest to a…

Q: What effect do interest rates have on bond prices? What are the fundamental assumptions that go into…

A: SOLUTION-   A BOND REPRESENTS A PROMISE BY A BORROWER TO PAY A LENDER THEIR PRINCIPLE AND USUALLY…

Q: Explain how mortgage-backed securities, collateralised debt obligations and credit default swaps are…

A: Mortgage backed securities: Mortgage is a loan secured by some real estate property or commericial…

Q: Describe Why Some Bonds are Risky: Default Risk: Risk Premium: Impact of Economic Conditions

A: Bonds are a type of a financial security or a financial asset (for the investor) and like all…

Q: Explain constant amortizing mortgage (CAM)?

A: It is otherwise called an amortizing mortgage, is one where the principal and monthly interest…

Q: A CDO is a debt security collateralized by debt obligations, such as residential and commercial…

A: The question is asking whether a Collateralized Debt Obligation (CDO) is a type of debt security…

Q: residential mortgages and those backed by commercial mortgages

A: It’s easy to work out that if you’re applying for a mortgage for your business, you must be applying…

Q: Explain the term Fixed Interest Rate Mortgage (FRM) Loan?

A: Mortgage loans:   The mortgage is a type of loan in which a property or any other real estate is…

Q: are types of bond insurance available in the market (explain them)? How do the bond insurance affect…

A: Bond insurance are available in the market and this is done to improve the rating of bonds and…

Q: Why is it necessary to amortize the discount and premium on bond issues?

A: Introduction:   Bonds may be sold at a discount, at a premium, or at face value.

Q: What are bond issue costs? What is an underwriter?

A: Bonds: Bonds are a kind of interest bearing notes payable, usually issued by companies, universities…

Q: What variables influence bond market rates

A: This question deals with the variables influence bond market rates

Q: What is the major difference between CMOs and the other mortgage-backed securities?

A: Investment in securities are traded on Secondary Market where buyer and seller purchase or sale…

Q: Does the interest rate on a T-bond include a default risk premium? Explain.

A: Treasury bonds (T – Bonds) are the bonds which are issued by the U.S. Federal Government in form of…

Q: Explain Pricing Mortgage-Backed Bonds with example?

A: The question is based on the concept of mortgage backed bonds and pricing of these bonds. The…

Q: What is a securitized Bond?

A: When the outstanding bonds are pooled together to form a new category of product and then is traded…

Q: Explain Junior Mortgages?

A: Junior mortgage: A junior mortgage may be a contract subject to a to begin with or a past contract…

Q: Explain the Evolution of the Secondary Mortgage Market?

A: The secondary mortgage market is defined as a market created for the purpose and sale of existing…

Q: What is the relationship between interest rate level and bond price? Why must this relationship be…

A: Bonds are a type of long-term debt often offered by government and corporations to raise loan.

Q: Explain Mortgage-Backed Securities and the GNMA Payment Guarantee?

A: Asset backed securities (ABS) are financial securities. As the name suggests these securities are…

Q: What is the straight-line amortization technique for a bond discount or premium?

A: Bond with a straight-line amortization schedule The straight-line amortization technique is a way of…

Q: Explain Zero-Coupon Mortgage-Backed Bonds?

A: Bond is a debt instrument issued by companies and government. It is a fixed income instrument which…

Q: why is there a market for bonds?

A: The bond market, also known as the fixed income market or debt market, is a financial marketplace…

Q: What is the bond rating system?

A: A bond rating is an assessment of a bond's credit worthiness made by a rating agency. The rating…