Session 15: Fixed Income: Structured Securities Reading 55: Mortgage-Backed Sector of the Bond Market
LOS d: Compare and contrast the conditional prepayment rate (CPR) with the Public Securities Association (PSA) prepayment benchmark.
Which of the following is the best explanation of a single-monthly mortality rate? The single-monthly mortality rate is the:
A) |
assumed monthly prepayment rate for a pool. | |
B) |
assumed monthly prepayment rate for each individual loan. | |
C) |
realized monthly prepayment rate for a pool. | |
The single-monthly mortality rate is equal to the conditional prepayment rate expressed on a monthly basis. |