Price and Yield: Discounting the Pool's Cash Flows
This lesson is part of the course
In this lesson
You price a fictional pool per 100 of face at three yields and three speeds with NPV, find the yield at which speed does not matter and measure how faster prepayments hurt a premium bond.
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Lessons in this course
- The Mortgage Pool: Level Payments, Interest and Scheduled Principal Locked
- Prepayment Speeds: CPR, SMM and Prepaid Principal Locked
- Seasoning Ramps and Speed Multiples: 50%, 100%, 200% Locked
- Pass-Through Cash Flows: Servicing and Guarantee Fees Locked
- Weighted Average Life at Different Speeds Locked
- Price and Yield: Discounting the Pool's Cash Flows Locked
- Sequential Tranches: Who Gets the Principal First Locked
- Scenario Dashboard: Rates, Speeds, WAL and Negative Convexity Locked