Exchange Currency

stripped mortgage-backed securities

A mortgage-backed instrument which is comprised of two parts: interest and principal. In some cases, the security is made up of a certain percentage of both interest and principal. The ideal situation for investors is for the security to either be an interest-only strip or a principal-only strip. In these scenarios, the securities are very sensitive to the change in interest rate, so an investor will choose to purchase one or the other based on the direction he/she believes the interest rates are headed.

Related information about stripped mortgage-backed securities:
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  4. Stripped Mortgage-Backed Securities: Definition from Answers.com
    mortgage-backed certificates representing separated principal and interest components of the underlying mortgages.
     
  5. Stripped Mortgage Backed Securities - UCLA Anderson School of ...
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  6. dwight
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  8. The Quarterly Review Of Interest Rate Risk
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