What was developed in the early 1980s to offset some of the problems with traditional mortgage pass-throughs?
A) Variable rate mortgages.
B) Collateralized mortgage obligations (CMOs)
C) Leveraged buyouts (LBOs)
D) Deep discount bonds (DDBs)
E) High yield bonds.

Question

Quizplus · Accepted Answer

Collateralized mortgage obligations (CMOs) were developed in the early 1980s as a way to offset some of the problems with traditional mortgage pass-throughs. CMOs are structured to offer investors different tranches, or levels of risk, which can help to spread risk more evenly among investors.

What Was Developed in the Early 1980s to Offset Some