2467797
Description
Flashcards by dylan_earl, updated more than 1 year ago
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Created by dylan_earl
over 9 years ago
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| Question | Answer |
| What is a Mortgage Backed Security (MBS) | An asset/security backed by mortgages sold to investors |
| Who is involved in a National Housing Association (NHA) MBS? | CMHC/Administrator Issuers/Banks/Loans Companies etc Investors: Individuals/institutions |
| Difference between prepayable and non-prepayable? | Prepayable: Prepayment passed onto investor Non-prepayable: Yields lower than prepayable, because bank holds prepayment. |
| Calculating sale proceeds of MBS | Face Value * RPB Factor * Market Price + Accrued interest |
| Canadian Mortgage Bonds (CMB) are very different than MBS', with prepayment T/F | False Very similar, no prepayment |
| Why is prepayment bad? | Investors put their money away to be invested, not paid back right away (aka. not earning) |
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