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A person taking a "lie detector" test may be asked a question, such as "Was the gun that killed Hensley a, a) Colt, b) Smith & Wesson, c) Walther PPK, or d) Luger?" A guilty person should show more reaction on the polygraph to the correct gun, while an innocent person should the same reaction to all four responses. This type of questioning is part of the __________ test.
Securities
Assets indicating equity in a publicly-traded company, a bond signifying indebtedness to a company or government, or options granting ownership rights.
Collateralized Debt Obligations
Collateralized debt obligations (CDOs) are complex financial instruments that pool together cash flow-generating assets and repackages this asset pool into discrete tranches that can be sold to investors.
Default Risk
The potential that a borrower will fail to meet the obligations of a loan or debt agreement.
Mortgages
Loans specifically designed for the purchase of real estate, secured by the property itself.
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