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Investors did not have much interest in the mortgage pass-through securities based on a pool of mortgages. When the same pool of mortgages was converted
Investors did not have much interest in the mortgage pass-through securities based on a pool of mortgages. When the same pool of mortgages was converted into a collateralised mortgage obligation (CMO) structure, the securities became more popular with investors. Assess and explain the difference in investors interest between the pass-throughs and the CMOs. (6 marks)
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