Which of the following is not correct about Collateralized Debt Obligations (CDO)?

Question 1 options:

CDO include bundled mortgages only.

CDO may include bundled corporate loans, auto loans, home equity loans, credit card receivables, royalties, leases, but also mortgages.

CDO are divided and sold to investors in tranches, reflecting their degree of risk.

CDO are fixed-income securities that pay interest based on a bundle of underlying debt.

Question 1 b For no changes in monetary and fiscal policies, ____________ occurs during and after times of economic turmoil and uncertainties (i.e. economic downturn, a recession, or a depression), which __________________ during a period when spending is needed to boost economic activity.

Question 1b options:

deleveraging; puts upward pressure on investment spending as savings fall and risk-taking rises.

deleveraging; puts downward pressure on bond yields as savings rise and risk-taking falls.

leveraging; puts downward pressure on investment spending as savings rise and risk-taking falls.

leveraging; puts upward pressure on bond yields as savings fall and risk-taking rises.