7 unchanged sentences
We may utilize a variety of financial instruments in order to limit the effects of changes in interest rates on our operations.
−Removed: The principal instruments that we use are futures contracts, interest rate swaps and swaptions, and interest rate caps.
+Added: The principal instruments that we use are futures contracts, dual digital options, interest rate swaps and swaptions, and interest rate floors and caps.
These instruments are intended to serve as an economic hedge against future interest rate increases on our repurchase agreement borrowings.
5 unchanged sentences
Our profitability and the value of our investment portfolio (including derivatives used for hedging purposes) may be adversely affected during any period as a result of changing interest rates, including changes in the forward yield curve.
−Removed: Our portfolio of PT RMBS is typically comprised of adjustable-rate RMBS (“ARMs”), fixed-rate RMBS and hybrid adjustable-rate RMBS.
+Added: Our portfolio of PT RMBS is typically comprised of fixed rate RMBS, adjustable-rate RMBS (“ARMs”) and hybrid adjustable-rate RMBS.
We generally seek to acquire low duration assets that offer high levels of protection from mortgage prepayments provided they are reasonably priced by the market.
56 unchanged sentences
We refer to this as "spread risk" or "basis risk." The spread risk associated with our mortgage assets and the resulting fluctuations in fair value of these securities can occur independent of changes in benchmark interest rates and may relate to other factors impacting the mortgage and fixed income markets, such as actual or anticipated monetary policy actions by the Fed, market liquidity, or changes in required rates of return on different assets.
−Removed: Consequently, while we use futures contracts and interest rate swaps and swaptions to attempt to protect against moves in interest rates, such instruments typically will not protect our net book value against spread risk.
+Added: Consequently, while we use futures contracts, dual digital options, interest rate swaps and swaptions, and interest rate floors and caps to attempt to protect against moves in interest rates, such instruments typically will not protect our net book value against spread risk.
Liquidity Risk
8 unchanged sentences
The projected weighted average life and the duration (or interest rate sensitivity) of our investments is based on our Manager's assumptions regarding the rate at which the borrowers will prepay the underlying mortgage loans.
−Removed: In general, we use futures contracts and interest rate swaps and swaptions to help manage our funding cost on our investments in the event that interest rates rise.
+Added: In general, we use futures contracts, dual digital options and interest rate swaps and swaptions to help manage our funding cost on our investments in the event that interest rates rise.
These hedging instruments allow us to reduce our funding exposure on the notional amount of the instrument for a specified period of time.
10 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.