Collateralized Mortgage Obligations
For information about CMO functions, see the CMO Workflow.
|Generate cash flows for sequential collateralized mortgage obligation (CMO)|
|Generate cash flows for scheduled collateralized mortgage obligation (CMO) using PAC or TAC model|
|Generate principal balance schedule for planned amortization class (PAC) or targeted amortization class (TAC) bond|
Examples and How To
This example shows how to use an underlying MBS pool for a 30-year fixed-rate mortgage to define a PAC bond and then define a sequential CMO.
Financial Instruments Toolbox™ supports collateralized mortgage obligations (CMOs) to provide a greater range of risk and return characteristics than mortgage-backed securities (MBS).
Prepayment risk is the risk that the term of the security varies according to differing rates of repayment of principal by borrowers.
Workflow for developing a CMO.