Prepayment Risk
Probability that, if interest rates fall, debtors or mortgagors will pay off their obligations (by refinancing them at lower current rates) thus forcing the investor or lender to reinvest at lower rates.
Probability that, if interest rates fall, debtors or mortgagors will pay off their obligations (by refinancing them at lower current rates) thus forcing the investor or lender to reinvest at lower rates.
