Analyzing an asset-backed security transaction

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1. Discuss the pros and cons of tax-backed and revenue municipal bonds and the advantages and disadvantages of including them in a portfolio.

2. Evaluate the most important factor in analyzing an asset-backed security transaction and analyze the use of these assets in a portfolio.

3. Rank the following bonds from the least to the greatest reinvestment risk and justify your answers.

a. A 10-year bond with a 5.25% coupon.

b. A 10-year bond with a 6.75% coupon.

c. A 15-year bond with a 6.75% coupon.

d. A 15-year bond with a zero-coupon.

Reference no: EM131959531

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