Series 7: 2.14.2.1 Estimating Prepayment Risk

Taken from our Series 7 Top-off Online Guide

2.14.2.1  Estimating Prepayment Risk

A mortgage security “matures” when the investor receives the final principal payment. Most CMO tranches have a stated maturity based on the latest date on which the principal from the collateral could be paid in full. This date may turn out to be inaccurate because it assumes no prepayments on the underlying mortgage loans.

CMOs are more often discussed in terms of their average life r

Since you're reading about Series 7: 2.14.2.1 Estimating Prepayment Risk, you might also be interested in:

Solomon Exam Prep Study Materials for the Series 7
Please Enable Javascript
to view this content!