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:

Vacant

Vacant refers to a space or position that is unoccupied or not filled, available for use or to be taken by someone.

Uninhabitable

A condition of a property that makes it unsuitable for people to live in due to risks to health and safety.

Homeowners' Policy

Insurance coverage designed to protect homeowners from financial losses related to their home, such as damages from disasters, theft, or liability for accidents.

Liability Coverage

Insurance protection that provides the insured party with protection against claims resulting from injuries and damage to people and/or property.