Which of the following statements best describes the characteristics of a Collateralized Mortgage Obligation CMO)?
A)Each issue is divided into several tranches that are strictly prioritized in terms of the receipts of the scheduled principal and interest repayments.
B)The CMO holders have a call protection in the sense that the bonds will not be prematurely called.
C)Because the CMO is divided into several tranches, the holder of each tranche no longer bears any risk.
D)Only a and b
E)Only b and c

Question

Quizplus · Accepted Answer

The Answer of Which of the following statements best describes the characteristics of a Collateralized Mortgage Obligation CMO)?
A)Each issue is divided into several tranches that are strictly prioritized in terms of the receipts of the scheduled principal and interest repayments.
B)The CMO holders have a call protection in the sense that the bonds will not be prematurely called.
C)Because the CMO is divided into several tranches, the holder of each tranche no longer bears any risk.
D)Only a and b
E)Only b and c

Which of the Following Statements Best Describes the Characteristics of a Collateralized