Derivative mortgage securities: An overview

Derivative mortgage securities have proliferated since planned amortization and floating rate CMO classes were introduced in late 1986. Other recently created derivative securities include reverse floaters and deep-discount bonds of CMOs, CMO residuals, and stripped and senior/subordinated passthroughs. These securities, which are derived from fixed-rate mortgages, were created to meet investor demands for maturity certainly, interest rate and prepayment hedging, and enhanced credit. The rapid growth of derivative securities reflects expansion of the investor base for fixed-rate mortgages. It also suggests that these mortgages will continue to be a viable housing finance instrument in a volatile interest rate environment. For the future, the increased creation of derivative securities will make the secondary mortgage market more efficient, facilitating the funding of fixed-rate mortgage originations.The substance of this paper was originally written in late 1987 and many of the specific data reflect that time period.     

Optimum allocation in Bayesian stratified two-phase sampling when there arem-attributes

The problem of optimally allocating a sample amongk-strata at the second phase of a two-phase sampling procedure when the sampling is for proportion has been discussed byNewbold [1971] and then by the author [Khan, 1972].This paper deals with optimum allocation of the sample amongk-strata at the second phase of a two-phase sampling procedure, when the sampling is form-attributes. The problem is to estimate the proportion of each attribute in the population. Here (m–1) dimensional Dirichlet distribution is taken as the prior distribution.     

Regulated Efficiency, World Trade Organization Accession, and the Motor Vehicle Sector in China

This article is concerned with the interaction of regulatedefficiency and World Trade Organization (WTO) accession andits impact on China's motor vehicle sector. The analysis isconducted using a 23 sector–25 region computable generalequilibrium model. Regulatory reform and internal restructuringare found to be critical. Restructuring is represented by acost reduction following from consolidation and rationalizationthat moves costs toward global norms. Without restructuring,WTO accession means a surge of final imports, though importsof parts could well fall as production moves offshore. However,with restructuring, the final assembly industry can be madecompetitive by world standards, with a strengthened positionfor the industry.