| MBS | Effective duration | OAS | Z-spread | Option cost(*2) | OAS/Option cost |
| W | (*1) | 0.28% | 0.79% | 0.51% | 0.5490 |
| X | (*1) | 0.49% | 1.16% | 0.67% | 0.7313 (*3) |
| Y | (*1) | 0.31% | 1.12% | 0.81% | 0.3827 |
| Z | (*1) | 0.40% | 1.14% | 0.74% | 0.5405 |
(*1) approximately the same
(*2) Option cost = Z-spread - OAS
(*3) This MBS will add the most value relative tot the risk associated with the security because the MBS-X has the highest OAS realtive to the cost of the option embedded in the MBS. Therefore, it is the most attractive of the four alternative.
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