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Mortgage pass-through security

Definition:

Also called a passthrough, a security created when one or more mortgage holders form a collection (pool) of mortgages and sells shares or participation certificates in the pool. The cash flow from the collateral pool is "passed through" to the security holder as monthly payments of principal, interest, and prepayments. This is the predominant type of MBS traded in the secondary market.

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

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Revenue Anticipation Note (RAN)

A short-term municipal debt issue that will be repaid with anticipated revenues, such as sales taxes, from the project.

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