Is prepayment risk taken into account when quoting nominal rates?作者: tarunajwani 时间: 2011-7-13 13:42
Is prepayment risk taken into account when quoting nominal rates?作者: sameeragarwal 时间: 2011-7-13 13:42
WHAT they're trying to say is that nominal rates have nothing to do with prepayment risk...作者: Houjichasan 时间: 2011-7-13 13:42
Is this some kind of trick question?
NO EXCUSES作者: maryli 时间: 2011-7-13 13:42
1) You didn't phrase correctly, we all thought you meant nominal rate (i.e. real rate + inflation = nominal rate).
2) No it does not take prepayment into consideration. That is the whole weakness of the nominal spread--it does not remove or take any consideration of prepayment risk within the spread.
