Question
Which of the following statements pertaining to a collateralised mortgage obligation (CMO) is not true? Select one: a. CMO reduces the prepayment risk for all
Which of the following statements pertaining to a collateralised mortgage obligation (CMO) is not true?
Select one:
a. CMO reduces the prepayment risk for all tranches
b. CMOs are off-balance sheet items for the originating bank
c. CMO is structured to attract different types of investors
d. CMO is equivalent to double securitisation
e. CMO reduces prepayment risk for some tranches
Securitisation can lead to:
Select one:
a. a reduction of credit risk
b. a reduction of interest rate risk
c. a reduction of concentration risk
d. maintenance of customer relationships
e. All of the statements are correct.
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