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

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