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With Estate Puts, Beauty Is in the Eye of the Beholder
CFA Institute: Private Wealth Management Newsletter (August 2009)

A bond with an estate put (or survivor’s option) can be redeemed at face value by the holder’s heirs if the holder dies — an attractive feature to investors with a short life expectancy. How should an investor value such options?

Related Analytics: Survivor's Option Analyzer™

A Financial Analysis of Consumer Mortgage Decisions
Mortgage Bankers Association (June 2009)

With housing prices falling and mortgage rates near historic lows, many homeowners are tempted to take advantage of this by buying or refinancing. However, due the complexity of the mortgage market, despite all the available disclosures, many consumers are still left in the dark, and by not considering all the necessary facts, they often leaves thousands of dollars on the table.

This guidebook applies standard, well understood approaches and tools used by financial professionals, to provide financial planners, housing counselors and consumers with a clear road-map, to make the best decision on how to choosing a mortgage, when to refinance a mortgage, and when to pay down a mortgage versus investing.

Related Analytics: Mortgage Calculators

What Makes the Municipal Yield Curve Rise?
The Journal of Fixed Income (Winter 2008)

The municipal yield curve’s permanent upward slope is a logical consequence of that curve being comprised of bonds callable at or close to par after 10 years. Previous researchers have overlooked this simple, straightforward explanation.

Related Analytics: iteRate™

Callable Bonds: Better Value Than Advertised?
Journal of Applied Corporate Finance (Summer 2008)

On an after-tax basis, callable bonds can be a good deal for both issuer and investor.

Mortgage Servicing Rights and Interest Rate Volatility
Mortgage Risk (May 2008)

Standard prepayment models produce faulty results when valuing mortgage servicing rights. More reliable conclusions are obtained from an option-based prepayment model that includes volatility of interest rates as an input.

Related Analytics: CLEAN™ MBS Prepayment and Valuation Model

Optimal Mortgage Refinancing: Application of Bond Valuation Tools to Household Risk Management
Applied Financial Economics Letters (Vol. 1, 2008)

Concepts long known from research on callable bonds help provide a rigorous and robust solution to the elusive question of when is it optimal for a borrower to refinance a residential mortgage.