Lag response of prepayments

Definition:

A delay of typically about three months between the time the weighted-average coupon of an MBS pool crosses the threshold for refinancing and observation of an acceleration in prepayment speed is observed.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Regulation U

Federal Reserve Board limit on how much credit a bank can allow a customer for the purchase and carrying of margin securities.

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!


Create your free portfolio