Collateralized Mortgage Obligations (CMOs)

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

The re-packaging and selling of financial receivables is called

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1. The prepayment risk in mortgage-backed-obligation is caused primarily by

2. Mortgage-backed-obligations issued in multiple tranches are called

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About This Quiz & Worksheet

Using the worksheet and quiz gives you a clear look at how much you know about collateralized mortgage obligations (CMOs). Mortgage-backed-obligations and their prepayment risk are some topics you need to understand for the quiz.

Quiz & Worksheet Goals

Take the quiz to see what you know about:

  • Mortgage-backed-obligations issued in multiple 'tranches'
  • Who assigns credit ratings to collateralized mortgage obligations
  • Name for the re-packaging and selling of financial receivables
  • The cause of the prepayment risk in mortgage-backed-obligation

Skills Practiced

  • Reading comprehension - ensure that you draw the most important information from the lesson on collateralized mortgage obligations
  • Information recall - access the knowledge you have gained about how a mortgage lender that originates and holds a fixed-rate mortgage portfolio will be affected by interest rates versus how the mortgagor will be affected
  • Interpreting information - verify that you can read information about why there is a prepayment risk in mortgage-backed-obligations and interpret it correctly

Additional Learning

You can review more by accessing the lesson called Collateralized Mortgage Obligations (CMOs). Use this lesson any time to:

  • Identify the different types of CMOs
  • Explain what 'tranche' means
  • Understand how CMOs work
  • Review the history of CMOs
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