A collateralized mortgage obligation: A. Eliminates prepayment risk. B. Is created from a pool of conforming loans.

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A collateralized mortgage obligation:

A. Eliminates prepayment risk.

B. Is created from a pool of conforming loans.

C. Redistributes various forms of prepayment risk among different bond classes.

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Fixed Income Analysis

ISBN: 9781119850540

5th Edition

Authors: Barbara S. Petitt

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Question Posted: Nov 04, 2023 11:10 PM

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A collateralized mortgage obligation: A. Eliminates prepayment risk. B. Is created from a pool of conforming loans.

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C is correct CMOs are created by redistri...View the full answer

Fixed Income Analysis

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