Weighted Average Coupon (WAC)
Contents
Demystifying Weighted Average Coupon (WAC) in Mortgage-backed Securities
Unlock the complexities of the weighted average coupon (WAC) in mortgage-backed securities (MBS). Delve into its calculation, significance, and implications for investors, alongside insights into the 2007-2008 financial crisis and its relation to MBS.
Understanding Weighted Average Coupon (WAC)
Discover how WAC serves as a crucial metric in assessing the rate of return on pools of mortgages within MBS. Explore its calculation methodology and how it evolves over time as mortgages are repaid.
Calculating the WAC
Gain insight into the intricate process of calculating WAC, involving the weighted average of interest rates on underlying mortgages. Explore practical examples illustrating WAC computation and its impact on investment analysis.