Abstract
This article presents a simple method for generating a primary mortgage loan yield curve using the relation, derived herein, between a coupon-bearing mortgage loan’s value and a portfolio of equal risk mortgage zero-coupon bonds. This new methodology is transparent because it is based on readily available government data. We provide an example to illustrate the computations involved.
- © 2012 Pageant Media Ltd
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A Simple, Transparent, and Accurate Mortgage
Valuation Yield Curve
Valuation Yield Curve
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