1) Collateral Mortgage Obligation (CMO) bonds: a) Are not a fixed income investment b) pass commercial mortgage collateral debt service payments directly through to each investment class c) Create a variety of bond classes with differing maturities, risk protection and return profiles to fit institutional investor needs. d) Are taxed at the deal structure/entity level and at the investor level.

2) Which of the following are used to size a commercial mortgage? a) Maximum LTV Test 4 Part II b) Maximum Debt Service Coverage Ratio Test c) Minimum Debt Yield Test d) Both (a) and (c).