A Comparison of the Reinvestment Risk of the Price Level Adjusted Mortgage and the Standard Fixed Payment Mortgage

Autor:	Arthur L. Houston
Rok vydání:	1988
Předmět:	Economics and Econometrics Reinvestment risk Actuarial science Financial economics Shared appreciation mortgage Mortgage insurance Accounting Economics Balloon payment mortgage Price level Collateralized mortgage obligation Mortgage underwriting Real interest rate Finance
Zdroj:	Real Estate Economics. 16:34-49
ISSN:	1540-6229 1080-8620
DOI:	10.1111/1540-6229.00442
Popis:	The purpose of this paper is to increase the understanding of the risk of the indexed mortgage, commonly referred to as the price level adjusted mortgage (PLAM). This is accomplished by comparing, analytically, the reinvestment risk of the PLAM and the standard fixed-payment mortgage (FPM) under conditions of stochastic inflation and real interest rates. The conclusion is that the PLAM has less reinvestment risk. From the viewpoint of an investor concerned with periodically reinvesting payment streams, the PLAM is the superior mortgage.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::46736d5f646aa2afe71815098a50befc https://doi.org/10.1111/1540-6229.00442 Zobrazit plný text záznamu Plný text ve formátu PDF