Dollar roll market

[shanlane]

Hello,

I am reading Ch 2 of "Mortgage Backed Securities" and am having a REALLY difficult time following the discussion on the dollar roll market. There is even an example in the text but since the numbers are pulled out of thin air it does not help that much. Maybe I am just getting confused by where the cash is going and what is actually meant by investors and dealers in this context, but I have read these same three pages a dozen times and it is still not sinking in. The idea seems easy enough, but when it starts talking about "going special" I got completely lost. If there is any way you could spare a minute of your busy day to help exaplin this it would be great!!

Thanks,
Shannon

 

[David Harper CFA FRM]

Hi Shannon,

I agree that section is difficult! But we are currently working on the content itself, so if the question seeks a general explanation, I would prefer to keep a focus on the original content rather than dilute by creating multiple explains (of course I am always here to help with questions), otherwise, I won't even get to sleep for the next four months! I hope you understand, thanks, David

 

[shanlane]

I certainly do. I will keep an eye open for the new material. By the way, is there any value in watching the videos of the sections that were removed since last year's exam?

Thanks,
Shannon

 

[David Harper CFA FRM]

Shannon, I don't think that would be the best use of time. Sure there is some value, but i think most candidates have to prioritize ... thanks, David

 

[shanlane]

Thank you!

Shannon