ted For Research Study 55 Data Analysis 57 Data Analysis Technique 57 Appropriateness of data analysis technique 59 Description on Questionnaire Formulation 61 Findings of the Research (CMO Valuation Model) 62 Reliability on the Data 62 Chapter Summary 63 Chapter Four: Methods 64 Introduction 64 Research Method 64 Research Design 66 Population and Sample 67 Sampling and Sampling Technique 67 Research Instrument 68 Primary Data Collection 69 Secondary Data Collection 70 Ethical Issues 71 Chapter Five: Findings 72 Introduction 72 Overview of the Study 72 Findings 72 Research Question One 73 Degree of relationship between the yield of FNMA-supported tranches and return on the US treasury bonds 73 Effect of Projected and Market Consensus on Subprime MSRs 76 Research Question Two 77 Relationship between the yields of FNMA-supported tranches and the assumption of the prepayment speed 77 Factors influencing the term structure of interest rate 79 Review on Subprime Meltdown 80 Research Question Three 80 Fundamentals of CMO valuation identified through secondary data collection 81 Research Question 4 91 Quantitative representation of the MSR Price Impact 91 Component MSR Price Impact: 91 Total MSR Price Impact: 91 Impact on Sample Residual Interest is More Significant: 92 Fixed-rate mortgage valuation methodologies 93 Benchmark method 93 Rapid approximation method 96 Rational valuation approach 97 References 98 Dedication Acknowledgments Abstract Chapter One: Introduction This proposed quantitative descriptive research study discusses the various valuation methodologies of prepayment speeds with Collateralized Mortgage Obligations (CMO) tranches and analyzing how the prevalent valuation methods are useful in current complex economic scenarios. The objective of this study is primarily to examine the applicability of various methods of valuation for pricing the CMOs so as to determine their validity in the present economic conditions. Chapter 1 provides a broad overview of the various facets with respect to the valuation of the prepayment speeds within CMO tranches. Collateralized Mortgage Obligations are derivative debt instruments that can be aptly defined as the claim that arises out of cash flows from large pools of home mortgages. The structure of CMO is such that once the principal and interest received from the mortgage holders it is distributed to tranches. The principal amount, the coupon rate, the prepayment risk and the maturity date differ among the tranches (Economy Watch, n. d.). CMOs are derivative debt instruments providing both retail and institutional investors the possibility of higher yields with a Standard & Poors AA
Dissertation Proposal - Collateralized Mortgage Obligation Valuation Methods Copyright 2012 Collateralized Mortgage Obligation Valuation Methods April 2012 Approved: Contents Dedication 6 Acknowledgments 7 Abstract 8 Chapter One: Introduction 9 Background of the Problem 10 Problem Statement 11 Purpose Statement 12 Significance of Study 13 Importance and Contribution of the Study in Current and Future Research Thoughts 13 Nature of Study 15 Research Questions / Hypothesis 16 Theoretical Framework 18 Definitions 20 Assumptions 21 Scope, Limitation and Delimitations 21 Chapter Summary 22 Chapter Two: Literature Review 24 Historical Overview of the Literature 25 Major Approaches to CMO Evaluation…
Credit risk management contains some key principles that are: a clear structure should be established, accountability and responsibility should be allocated, prioritize the processes, clear communication of assigned responsibilities and answerability assigned thereto.Credit risk management has an overwhelming concern on a bank.
In some cases the losses incurred by the financial institutes are also the products of unethical behavior of the internal staff system of which a very recent example can be attributed to the subprime mortgage crisis which led to tremendous losses to several reputed banks in the United States of America and Europe.
The findings of this research will provide insight of Tate & Lyle plc as one of the leading companies in the UK which provide the food, food ingredients and services solutions to other companies and businesses. Mainly Tate & Lyle plc operates under two segments; Specialty Food Ingredients and Bulk Ingredients. Both segments work independently.
Based on the descriptive statistical results, increasing the dividend payout does not necessarily mean that a telecommunication company is experiencing an increase in corporate profitability or an increase in corporate earnings. In fact, increasing the dividend payout could also decrease the corporate earnings.
IBM Global Financing is involved in the business of providing loans to its customers for purposes of IT leasing and purchase of equipment. In recent decades, IBM has instituted measures such as no requirement for financial statements for loan amounts less than $300,000 to $500,000.
The interplay between these two factors can lead to shocks in housing prices, the financial position of the householders and the economic growth of the country. These sectors can further impact the credit rate channel, the interest rate channel, and also make an impact on residential construction.
Results and Findings 12 2.1 Lehman Brother 12 2.1.1 Lehman Brother before Bankruptcy 12 2.1.2 Bankruptcy of Lehman as a pointer of Subprime crisis 14 2.1.3 Effects of Bankruptcy of Lehman Brothers 16 2.2 Northern Rock 17 2.2.1 Pathway to Bankruptcy 18 2.2.2 Spill over effect of US sub-prime crisis on UK 19 2.2.3 The positive outcome 20 2.3 Housing Price Index 23 4.
The effect of the U.S. Subprime Crisis to the China commercial banks in 2008-2013.
The sub-prime mortgage crisis that originated in the United States of America basically started from August 2007 and had transformed the financial markets around the world.
Every corporation comprises of two different stakeholders – the shareholders and the managers – that normally face off with each other. The shareholders are interested in maximizing their wealth and hence tend to take higher risks in anticipation of higher gains whereas the managers tend to take lower risks to ensure lower managerial overheads.
60 pages (15000 words)Dissertation
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