TAILIEUCHUNG - ANATOMY OF STOCK MARKET BUBBLES

Amortizing securities, such as mortgage securities, have similar performance characteristics. A mortgage borrower has the right to pay off, or “call,” the debt before maturity. The mortgage lender therefore has sold a call option to the borrower. Since mortgage securities pass through cash flow from the underlying mortgage loans to investors, investors in mortgage securities have effectively sold call options to borrowers. The homeowners have the economic incentive to exercise these options and prepay when interest rates have fallen, allowing them to refinance and get new mortgages at lower interest rates. The prepayment option. | Anatomy of Stock Market Bubbles ICFAI Books An Introduction ICFAI BOOKS is the initiative of the ICFAI University Press to publish a series of books in the areas of finance management and allied areas with a special focus on emerging and frontier areas. These books seek to provide at one place a retrospective as well as prospective view of the contemporary developments in the environment with emphasis on general and specialized branches of knowledge and applications. The articles are organized in a sequential and logical way that makes reading continuous and helps the reader acquire a holistic view of the subject. This helps in strengthening the understanding of the subject better and also enables the readers stretch their thoughts beyond the content of the book. The series is designed to meet the requirements of executives research scholars academicians and students of professional programs. The ICFAI University Press has published over 750 books in this series. For full details readers are invited to visit our website books. Anatomy of Stock Market Bubbles Gyõrgy Komáromi ICFAI Books The ICFAI University .

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