We use OAS as a “robust” measure of value for mortgage securities. Mortgages have uncertain cash flows due to prepayments. Simple static spread assumes a fixed series
Option Adjusted Spread
![Option Adjusted Spread](https://emadzikry.com/wp-content/uploads/2023/09/download-1.png)
We use OAS as a “robust” measure of value for mortgage securities. Mortgages have uncertain cash flows due to prepayments. Simple static spread assumes a fixed series