Why is a pass-through security a path-dependent cash flow security?
What will be an ideal response?
In the case of mortgage pass-through securities, prepayments are path dependent because this month's prepayment rate depends on whether there have been prior opportunities to refinance since the underlying mortgages were originated.
Unlike mortgage loans, the decision as to whether a corporate issuer will elect to refund an issue when the current rate is below the issue's coupon rate is not dependent on how rates evolved over time to the current level.Moreover, in the case of adjustable-rate pass-throughs (ARMs), prepayments are not only path dependent but the periodic coupon rate depends on the history of the reference rate upon which the coupon rate is determined. This is because ARMs have periodic caps and floors as well as a lifetime cap and floor.
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In general, what are the five ways companies use database marketing?
What will be an ideal response?
Alieia Boat Company manufactures 10 luxury yachts per month. A navigation system is included in each yacht. Alieia Boat manufactures the navigation system in-house but is considering the possibility of outsourcing this function. At present, the variable cost per unit is $300, and the fixed costs are $38,000 per month. If it outsources the security system, fixed costs could be reduced by half, and the vacant facilities could be rented out to earn $3000 per month of rental income. What is the maximum contract cost that Alieia should pay for outsourcing?
A) any cost lower than $2500 per unit B) any cost lower than $2200 per unit C) any cost lower than $300 per unit D) any cost lower than $3800 per unit
A set of tools that are used to store, manage, and present information sources, such as customer information, documents, policies, procedures, and incident resolutions are called a ____.
A. knowledge base B. knowledge management system C. problem database D. known error database
A company purchased equipment and signed a 7-year installment loan at 9% annual interest. The annual payments equal $9,000. The present value for an annuity (series of payments) at 9% for 7 years is 5.0330. The present value of 1 (single sum) for 7 years at 9% is 0.5470. The present value of the loan is:
A. $4,923. B. $63,000. C. $45,297. D. $9,000. E. $16,453.