Ronn, Ehud I.; Rubinstein, Peter D.; Pan, Fung-Shine - In: Real Estate Economics 23 (1995) 1, pp. 1-20
In an efficient market, the no-arbitrage condition implies that the price difference between any two assets must be the market value of all differences in their cash flows. We use this logic to deduce the price of the prepayment option embedded in fixed-rate Government National Mortgage...