1. Despite the 2008 crisis, the demand for CDOs is growing again.

a. Explain why this demand is growing again. (5 points) b. Discuss what happened before 2008 and what regulatory measures were taken for this not to happen again. Explain why you believes these measures will or won't prevent another crisis. (10 points)

c. Describe the typical structure of a balance sheet CDO using a diagram and explain the various financial tools used. (10 points)

d. Describe an arbitrage CDO. Explain what a credit enhancer is and how it works.

c. You are an investment specialist in a bank, your client heard about another form of fixed income instrument called Collateralised Debt Obligations and was told these structures were complex. Please explain him how CDO's can be structured