Collateralized Mortgage Obligations (CMOs)

question 15

Multiple Choice

Collateralized mortgage obligations (CMOs)

• A)are free of interest rate risk
• B)have certain repayment schedules
• C)are not exempt from federal income taxation
• D)increase in value when interest rates rise

---

Definitions:

Secondary Circular Reaction

A stage in Piaget's theory of cognitive development where infants repeat actions that are pleasurable or produce interesting results, typically occurring from 4 to 8 months of age.

Primary Circular Reaction

An early developmental stage where infants repeat an action that they accidentally discovered, focusing on their own body.

Tertiary Circular Reaction

A stage in Piaget's theory of cognitive development during which toddlers experiment with new behaviors to see the outcomes, typically observed around 12 to 18 months of age.

Invention

The creation of a new device, method, or process, developed from study and experimentation.