What Action Is Involved in Constructing a Synthetic CDO

question 11

Multiple Choice

What action is involved in constructing a synthetic CDO?

• A) Selling protection via CDS contracts.
• B) Buying protection via CDS conracts.
• C) Selling tranches of other CDOs.
• D) Buying a diversified equity portfolio.

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Definitions:

Authority

Refers to the power or right to give orders, make decisions, or enforce obedience.

Accountability

The obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner.

Organizational Behavior

Examining how humans behave within organizations, how they interact with these organizations, and the analysis of the organizations themselves.

Internal Processes

The operations or activities that occur within an organization or system which are crucial for its functioning.