IDEAS home Printed from https://ideas.repec.org/a/oup/revage/v15y1993i3p547-566..html
   My bibliography  Save this article

Competitive Pricing of Farmer Mac's Mortgage-Backed Securities and Its Future Viability: A Contingent Claims Analysis Approach

Author

Listed:
  • Raj K. Chhikara
  • Steven D. Hanson

Abstract

A continuous-time contingent claims pricing model is used to price Farmer Mac mortgage-backed securities. The required investor yields are then compared with mortgage rates from various financial institutions to determine the competitiveness of loan rates needed for the Farmer Mac market Our results indicate that Farmer Mac I, the secondary market program for agricultural real estate and rural housing loans, may have difficulty offering competitive rates under its fixed-rate mortgage structure, largely as a result of new risk-based capital adequacy regulations. On the other hand, Farmer Mac II, the secondary market program for Farmers Home Administration (FmHA) guaranteed loans, is likely to be strongly competitive.

Suggested Citation

  • Raj K. Chhikara & Steven D. Hanson, 1993. "Competitive Pricing of Farmer Mac's Mortgage-Backed Securities and Its Future Viability: A Contingent Claims Analysis Approach," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 15(3), pages 547-566.
    • Handle: RePEc:oup:revage:v:15:y:1993:i:3:p:547-566.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.2307/1349488
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kerry D. Vandell, 1997. "Improving secondary markets in rural America," Proceedings – Rural and Agricultural Conferences, Federal Reserve Bank of Kansas City, issue Apr, pages 85-120.
    2. Jones, David, 2000. "Emerging problems with the Basel Capital Accord: Regulatory capital arbitrage and related issues," Journal of Banking & Finance, Elsevier, vol. 24(1-2), pages 35-58, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:revage:v:15:y:1993:i:3:p:547-566.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press or Christopher F. Baum (email available below). General contact details of provider: https://edirc.repec.org/data/aaeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.