The price of a mortgage is calculated using the present value of future cash flows, which includes an interest payment, CC, a principal payment, PrinPrin, the number of periods until the mortgage is to be paid off, tt, and a required rate of return, kk.
Mathematically, the general price movement of mortgages can be modeled as which of the following?
?PM=f(k)?PM=f(k)
?PM=f(?k,?Prin)?PM=f(?k,?Prin)
?PM=f(?k,?C)?PM=f(?k,?C)
?PM=f(?k)
What are the type of securities that are issued to financial institutions where the funds are used to increase liquidity in the secondary mortgage market by financing the origination of mortgages? Check all that apply.
Private-label pass-through securities
Government National Mortgage Association (Ginnie Mae) mortgage-backed securities
Federal Home Loan Mortgage Association (Freddie Mac) participation certificates
Federal National Mortgage Association (Fannie Mae) mortgage-backed securities
