Products & RisksCâu 53 / 125
A collateralized mortgage obligation (CMO) is structured into tranches primarily to:
a.Redistribute prepayment and maturity risk among classes with different priorities
b.Guarantee investors will never lose principal
c.Eliminate all interest rate risk
d.Convert debt into equity
Giải thích
A CMO divides the cash flows from a pool of mortgages into tranches that receive principal in a set order, redistributing prepayment and average-life risk. Earlier tranches receive principal first and have shorter, more predictable lives, while later tranches bear more extension or prepayment uncertainty.
Luyện miễn phí toàn bộ 125 câu hỏi — không cần đăng ký.
Câu hỏi liên quan cùng chủ đề
- A warrant differs from a right in that a warrant:
- A money market instrument such as commercial paper is best described as:
- An investor sells 1 XYZ 30 put for a premium of 2. What is the maximum gain and the breakeven point?
- Preferred stock is generally considered more sensitive to interest rate changes than common stock because preferred:
- An investor establishes a short straddle by selling 1 XYZ 50 call for 3 and selling 1 XYZ 50 put for 2. The maximum gain is:
- An accredited or sophisticated investor is often required for a hedge fund because hedge funds:
Cập nhật gần nhất: · quy trình kiểm tra
Đội Ngũ Biên Tập PrepPass · Đối chiếu với FINRA Series 7 General Securities Representative Exam · Quy trình kiểm tra