A Collateralized Default Obligation (CDO) Is a Pool of Securities

question 16

Multiple Choice

A collateralized default obligation (CDO) is a pool of securities (collateral) whose cash flows are tranched and sold to investors who take different levels of credit loss in the portfolio. Which of the following is the least likely to be seen in a the collateral of a CDO.

• A) A portfolio of equities.
• B) A portfolio of bonds.
• C) A portfolio of CDS.
• D) A portfolio of CDOs.

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