Corporate bonds are sometimes packaged by commercial banks into ___________, in which investors receive the interest or principal payments generated by the debt securities.

Question

Corporate bonds are sometimes packaged by commercial banks into ___________, in which investors receive the interest or principal payments generated by the debt securities. ​

Quizplus · Accepted Answer

Collateralized debt obligations (CDOs) are financial tools that banks use to repackage individual loans (including corporate bonds) into a product sold to investors on the secondary market. These investors then receive the interest or principal payments generated by these debt securities.

Corporate Bonds Are Sometimes Packaged by Commercial Banks into ___________