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A Collateralized Debt Obligation (CDO)

Question 10

Multiple Choice

A collateralized debt obligation (CDO) :


A) is an insurance policy that any investor can purchase.
B) is a bond that is secured by a portfolio of mortgages.
C) protects an investor in the event that the issuer of the mortgage defaults on the contract.
D) acts as a hedge against changes in interest rates.
E) was outlawed with the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act .

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