Convexity exhibited by the mortgage-backed securities

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Reference no: EM132053001

Discuss the negative convexity exhibited by the mortgage-backed securities in the context of duration and pre-payment speed. what is "contraction risk" as it applies to mortgage-backed securities. briefly compare/contrast the characteristics of the PAC bond vs. the support bond in the planned amortization class type of CMO.

Reference no: EM132053001

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