MBS CPR

CFA Level II
#1

What the hell does “increased by 0.2% per year per month for the next 30 months”???

ITS REGARDING psa BENCHMARK THAT ASSUMES THE FOLLOWING:

I) 0.2% THE 1ST MONTH

II) THEN 0.2% PER YEAR PER MONTH FOR TEH NEXT 30 MONTHS UNTIL IT REACHES 6%

seems to me this must mean that its just 0.2% per month as 0.2*30=6% I am just really bothered by that sentence!

iii) THEN 6% UNTIL THE END

#2

look at the graph.

starts at 0 and goes up 0.2% per month to the next 30 months - to become 6%

then line at 6% horizontal.