Like equity, which is a long duration asset, these bonds in the index are
noncallable with 25 - 30 years of maturity.
Not exact matches
Treasury bonds (or alternate benchmarks, such as the
noncallable bonds of some other borrower, or interest rate swaps) are generally not available
with maturities exactly matching MBS cash flow payments, so interpolations are necessary to make the OAS calculation.
If, during this period, a high - grade,
noncallable, long - term bond
with a 12 percent coupon had existed, it would have sold far above par.