BROWSE

Z-Bond

What is 'Z-Bond'

The final tranche in a series of mortgage-backed securities that is the last one to receive payment. Used in some collateralized mortgage obligations (CMO), Z-bonds pay no coupon payments while principal is being paid on earlier bonds. Interest that would have been paid on Z-bonds is used instead to pay down principal more rapidly on the earlier series of bonds.

Explaining 'Z-Bond'

Interest payable on a Z-bond is added to the principal balance and becomes payable once claims on all prior bond classes have been satisfied. A Z-bond is similar to a zero-coupon bond, since it accrues interest rather than paying it out. Therefore, the final tranche is considered the most risky for the CMO class structures.


Further Reading


Exact solutions for bond and option prices with systematic jump risk
link.springer.com [PDF]
… Received August 22, 1994; Revised January 17, 1996 Abstract. A variety of realistic economic considerations make jump-diffusion models of interest rate dynamics an appealing modeling choice to price interest-rate contingent claims …

Efficacy of ceramic repair material on the bond strength of composite resin to zirconia ceramicEfficacy of ceramic repair material on the bond strength of composite resin to zirconia ceramic
www.tandfonline.com [PDF]
… Received August 22, 1994; Revised January 17, 1996 Abstract. A variety of realistic economic considerations make jump-diffusion models of interest rate dynamics an appealing modeling choice to price interest-rate contingent claims …

Effects of speaker variability and noise on Mandarin tone identification by native and non-native listenersEffects of speaker variability and noise on Mandarin tone identification by native and non-native listeners
www.tandfonline.com [PDF]
… Received August 22, 1994; Revised January 17, 1996 Abstract. A variety of realistic economic considerations make jump-diffusion models of interest rate dynamics an appealing modeling choice to price interest-rate contingent claims …

Bond ratings with artificial neural networks and econometric modelsBond ratings with artificial neural networks and econometric models
search.proquest.com [PDF]
… Received August 22, 1994; Revised January 17, 1996 Abstract. A variety of realistic economic considerations make jump-diffusion models of interest rate dynamics an appealing modeling choice to price interest-rate contingent claims …

Financial openness and financial development: An analysis using indicesFinancial openness and financial development: An analysis using indices
www.tandfonline.com [PDF]
… Received August 22, 1994; Revised January 17, 1996 Abstract. A variety of realistic economic considerations make jump-diffusion models of interest rate dynamics an appealing modeling choice to price interest-rate contingent claims …

The influence of profitability and liquidity to bond rating and the impact on the bond yieldThe influence of profitability and liquidity to bond rating and the impact on the bond yield
www.ssbfnet.com [PDF]
… Received August 22, 1994; Revised January 17, 1996 Abstract. A variety of realistic economic considerations make jump-diffusion models of interest rate dynamics an appealing modeling choice to price interest-rate contingent claims …

Competition between σ-hole pnicogen bond and π-hole tetrel bond in complexes of CFCompetition between σ-hole pnicogen bond and π-hole tetrel bond in complexes of CF
www.tandfonline.com [PDF]
… Received August 22, 1994; Revised January 17, 1996 Abstract. A variety of realistic economic considerations make jump-diffusion models of interest rate dynamics an appealing modeling choice to price interest-rate contingent claims …

The Relationship between Default Risk, Size and Financial Performance from Korean FirmsThe Relationship between Default Risk, Size and Financial Performance from Korean Firms
www.dbpia.co.kr [PDF]
… Received August 22, 1994; Revised January 17, 1996 Abstract. A variety of realistic economic considerations make jump-diffusion models of interest rate dynamics an appealing modeling choice to price interest-rate contingent claims …


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