Evaluating the Interest-Rate Risk of Adjustable-Rate Mortgage Loans

This paper evaluates the interest-rate risk inherent in an adjustable-rate mortgage (ARM) with sporadic rate adjustments and possibly binding periodic and life-of-loan rate change constraints. Simulation analysis forecasts ARM cash flows, determines the probability that constraints will hold, and partitions the loan into fixed and variable components. Simulation parameters are then altered to measure the impact of changes in contract terms and market conditions on the interest-rate risk of a typical ARM loan. Interest-rate sensitivity is found to be significantly less than that of fixed-rate loans and remarkably insensitive to changes in loan margins or initial loan rates after the first few years of an ARM's life. Therefore, it is not surprising that lenders have used these features to lure borrowers to ARMs. Periodic rate change limits and volatility in the underlying index are the only factors that influence the interest-rate risk of an existing ARM in a substantive way.

Illustrations of Financing and Tax Transfers in Owner Financed Real Estate Sales

The dramatic increase in seller or creative financing in the late 1970s and early 1980s has captured the attention of many academicians and practitioners. The primary focus in the existing literature is on explaining differences in loan terms between creative financing and conventional financing and on how these differences are capitalized into sale prices. This paper investigates the role of financing opportunity costs and federal income taxation and their consequences on real estate financing. Illustrations of the model show the feasibility of interpersonal financing transfers (between buyers and sellers) and intertemporal tax transfers (across time periods)

Bond Refunding In Efficient Markets: A Dynamic Analysis With Tax Effects

This paper provides a dynamic analysis of the bond refunding problem in an efficient market setting with corporate taxes and transaction costs. A new methodology is developed to analyze the optimal exercise problem in the presence of imperfections. This analysis enables prediction of the effect of changes in corporate tax laws on the refunding decision. It also explains the empirical observation that bonds are often called when the bond price is below the call price.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/108309/1/jfir00667.pd

Effective Hedging of Mortgage Interest Rate Risk

Unfortunately, the hedging effectiveness of the GNMA futures market has been diminished by a lack of understanding of the selection of proper hedge ratios. This paper presents a derivation of the optimal hedge ratio for hedging interest rate risk with a GNMA futures contract. The hedge ratio is then applied to different hedging situations and the results of the traditional and newly derived hedging strategies are examined

Neural Correlates of Competing Fear Behaviors Evoked by an Innately Aversive Stimulus

Environment and experience influence defensive behaviors, but the neural circuits mediating such effects are not well understood. We describe a new experimental model in which either flight or freezing reactions can be elicited from mice by innately aversive ultrasound. Flight and freezing are negatively correlated, suggesting a competition between fear motor systems. An unfamiliar environment or a previous aversive event, moreover, can alter the balance between these behaviors. To identify potential circuits controlling this competition, global activity patterns in the whole brain were surveyed in an unbiased manner by c-fos in situ hybridization, using novel experimental and analytical methods. Mice predominantly displaying freezing behavior had preferential neural activity in the lateral septum ventral and several medial and periventricular hypothalamic nuclei, whereas mice predominantly displaying flight had more activity in cortical, amygdalar, and striatal motor areas, the dorsolateral posterior zone of the hypothalamus, and the vertical limb of the diagonal band. These complementary patterns of c-fos induction, taken together with known connections between these structures, suggest ways in which the brain may mediate the balance between these opponent defensive behaviors

Medicare beneficiary panel characteristics associated with high Part D biologic disease-modifying anti-rheumatic drug prescribing for older adults among rheumatologists.

ABSTRACT: The aim of this study was to investigate beneficiary panel characteristics associated with rheumatologists' prescribing of biologic DMARDs (bDMARDs) for older adults.In this retrospective observational study, we used Medicare Public Use Files (PUFs) to identify rheumatologists who met criteria for high-prescribing, defined as bDMARD prescription constituting ≥20% of their DMARD claims for beneficiaries ≥65 years of age. We first used descriptive analysis then multivariable regression model to test the association of high prescribing of bDMARDs with rheumatologists' panel size and beneficiary characteristics. In particular, we quantified the proportion of panel beneficiaries ≥75 years of age to assess how caring for an older panel correlate with prescribing of bDMARDs.We identified 3197 unique rheumatologists, of whom 405 (13%) met criteria for high prescribing of bDMARDs for Medicare beneficiaries ≥65 years of age. The high-prescribers provided care to 12% of study older adults, and yet accounted for 21% of bDMARD prescriptions for them. High prescribing of bDMARDs was associated with smaller panel size, and their beneficiaries were more likely to be non-black, ≥75 years of age, non-dual eligible, have diagnosis of CHF, however, less likely to have CKD.Rheumatologists differ in their prescribing of bDMARDs for older adults, and those caring for more beneficiaries ≥75 years of age are more likely to be high-prescribers. Older adults are more prone to the side-effects of bDMARDs and further investigation is warranted to understand drivers of differential prescribing behaviors to optimize use of these high-risk and high-cost medications.http://deepblue.lib.umich.edu/bitstream/2027.42/170715/2/Medicare beneficiary panel characteristics associated with high Part D biologic disease-modifying anti-rheumatic drug prescr.pdfPublished versio

Debris disks as signposts of terrestrial planet formation. II Dependence of exoplanet architectures on giant planet and disk properties

We present models for the formation of terrestrial planets, and the collisional evolution of debris disks, in planetary systems that contain multiple unstable gas giants. We previously showed that the dynamics of the giant planets introduces a correlation between the presence of terrestrial planets and debris disks. Here we present new simulations that show that this connection is qualitatively robust to changes in: the mass distribution of the giant planets, the width and mass distribution of the outer planetesimal disk, and the presence of gas in the disk. We discuss how variations in these parameters affect the evolution. Systems with equal-mass giant planets undergo the most violent instabilities, and these destroy both terrestrial planets and the outer planetesimal disks that produce debris disks. In contrast, systems with low-mass giant planets efficiently produce both terrestrial planets and debris disks. A large fraction of systems with low-mass outermost giant planets have stable gaps between these planets that are frequently populated by planetesimals. Planetesimal belts between outer giant planets may affect debris disk SEDs. If Earth-mass seeds are present in outer planetesimal disks, the disks radially spread to colder temperatures. We argue that this may explain the very low frequency of > 1 Gyr-old solar-type stars with observed 24 micron excesses. Among the (limited) set of configurations explored, the best candidates for hosting terrestrial planets at ~1 AU are stars older than 0.1-1 Gyr with bright debris disks at 70 micron but with no currently-known giant planets. These systems combine evidence for rocky building blocks, with giant planet properties least likely to undergo destructive dynamical evolution. We predict an anti-correlation between debris disks and eccentric giant planets, and a positive correlation between debris disks and terrestrial planets.Comment: Astronomy and Astrophysics, in press. Movies from simulations are at http://www.obs.u-bordeaux1.fr/e3arths/raymond/movies_debris.htm

S-allylcysteine Improves Blood Flow Recovery and Prevents Ischemic Injury by Augmenting Neovasculogenesis.

Studies suggest that a low level of circulating human endothelial progenitor cells (EPCs) is a risk factor for ischemic injury and coronary artery disease (CAD). Consumption of S-allylcysteine (SAC) is known to prevent CAD. However, the protective effects of SAC on the ischemic injury are not yet clear. In this study, we examined whether SAC could improve blood flow recovery in ischemic tissues through EPC-mediated neovasculogenesis. The results demonstrate that SAC significantly enhances the neovasculogenesis of EPCs in vitro. The molecular mechanisms for SAC enhancement of neovasculogenesis include the activation of Akt/endothelial nitric oxide synthase signaling cascades. SAC increased the expression of c-kit, β-catenin, cyclin D1, and Cyclin-dependent kinase 4 (CDK4) proteins in EPCs. Daily intake of SAC at dosages of 0.2 and 2 mg/kg body weight significantly enhanced c-kit protein levels in vivo. We conclude that dietary consumption of SAC improves blood flow recovery and prevents ischemic injury by inducing neovasculogenesis in experimental models

Origin and Dynamics of the Mutually Inclined Orbits of Upsilon Andromedae c and d

We evaluate the orbital evolution and several plausible origins scenarios for the mutually inclined orbits of Upsilon Andromedae c and d. These two planets have orbital elements that oscillate with large amplitudes and lie close to the stability boundary. This configuration, and in particular the observed mutual inclination, demands an explanation. The planetary system may be influenced by a nearby low-mass star, Upsilon And B, which could perturb the planetary orbits, but we find it cannot modify two coplanar orbits into the observed mutual inclination of ~30 deg. However, it could incite ejections or collisions between planetary companions that subsequently raise the mutual inclination to >30 deg. Our simulated systems with large mutual inclinations tend to be further from the stability boundary than Upsilon And, but we are able to produce similar systems. We conclude that scattering is a plausible mechanism to explain the observed orbits of Upsilon And c and d, but we cannot determine whether the scattering was caused by instabilities among the planets themselves or by perturbations from Upsilon And B. We also develop a procedure to quantitatively compare numerous properties of the observed system to our numerical models. Although we only implement this procedure to Upsilon And, it may be applied to any exoplanetary system.Comment: 19 pages, 5 figures, accepted to Astrophysical Journa

Planet-planet scattering in planetesimal disks

We study the final architecture of planetary systems that evolve under the combined effects of planet-planet and planetesimal scattering. Using N-body simulations we investigate the dynamics of marginally unstable systems of gas and ice giants both in isolation and when the planets form interior to a planetesimal belt. The unstable isolated systems evolve under planet-planet scattering to yield an eccentricity distribution that matches that observed for extrasolar planets. When planetesimals are included the outcome depends upon the total mass of the planets. For system masses exceeding about one Jupiter mass the final eccentricity distribution remains broad, whereas for lower mass planetary systems a combination of divergent orbital evolution and recircularization of scattered planets results in a preponderance of nearly circular final orbits. We also study the fate of marginally stable multiple planet systems in the presence of planetesimal disks, and find that for high planet masses the majority of such systems evolve into resonance. A significant fraction lead to resonant chains that are planetary analogs of Jupiter's Galilean satellites. We predict that a transition from eccentric to near-circular orbits will be observed once extrasolar planet surveys detect sub-Jovian mass planets at orbital radii of 5-10 AU.Comment: ApJ Letters, in pres