Which of the Following Characteristics Apply to Collateralized Mortgage Obligations

question 103

Multiple Choice

Which of the following characteristics apply to collateralized mortgage obligations?
I. All bondholders receive a pro-rata share of all interest payments.
II. CMOs are derivative securities created from mortgage-backed bonds.
III. All principal payments are paid to the shortest remaining tranche.
IV. CMOs have definite maturity dates for each tranche.

• A) I and II only
• B) I and III only
• C) I, II and III only
• D) II, III and IV only

---

Definitions:

Triarchic Theory

A theory of intelligence proposed by Robert Sternberg, suggesting that intelligence consists of analytical, creative, and practical components.

Creativity

The ability to produce original and unusual ideas, or to make something new or imaginative.

Wolfgang Köhler

A German psychologist and one of the founders of Gestalt psychology, known for his work on insight learning.

Chimpanzees

A species of great ape native to the forests and savannahs of tropical Africa, known for their intelligence and complex social behaviors.