As Street research analysts have been highlighting recently, interest and activity in the hybrid ARM sector has been picking up since Lehman Brothers indicated it would be including its Hybrid ARM Index into the MBS Index on April 1, 2007.

In a report released last week, Lehman analysts reviewed potential trades with the new benchmark, potential returns from those trades, as well as any rich/cheap indicators that could help investors time their trades in order to increase the odds of outperforming the new index.

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