Asset Securitization Pricing Method

The pricing theory is the key factor of the asset-backed securitizationoperation. This paper tries to put forward a different view of prepaymentmodel and make some suggestions based on the research of the Chinesepractice. This paper composed of mainly four parts.Part 1: Introduce basic information and products of asset-backedsecuritization.Part 2: Analysis of the transfer pricing process. Make the analysis from acost view.Part 3: Introductions of static cash flow yield model, term structure ofinterest rates, option adjusted spread model and Monte Carlo model. Makecomparison of several basic pricing theories.Part 4: Deep study of prepayment model,take every possible factors intoconsideration and make conclusion based on a criteria. Make empirical studyon the prepayment behavior of our people .Make a different conclusion basedon Chinese practice.