Theses, Dissertations, and Capstone Projects

Year of Award

1989

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business

Department

Business Administration

Keywords

securities, risk, futures

Abstract

This paper presents a brief overview of mortgage banking and mortgage-backed securities, with special attention given to the unique characteristics of the'se financial instruments. The risk leading to the need for hedging mortgage-backed securities, as well as some of the more important concepts and terms associated with hedging are discussed. Alternatives are presented considering hedging with financial futures contracts, forward contracts and options. The advantages and disadvantages of each alternative are given with respect to hedging mortgage- backed securities portfolios and mortgage pipelines. Hedging strategies are hedged according to standards such as cost, complexity and effectiveness. This paper concludes that hedging with forward contracts and options may be more appropriate for risk-averse institutions than hedging with futures.

Comments

This thesis was selected for its superior quality, and was suggested as a good example for MBA students to follow.

Document Type

Restricted Thesis

Creative Commons License

Creative Commons Attribution-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-No Derivative Works 4.0 License.

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