Pools of mortgages put together,either by a government agency or by a private investment banking corporation,to raise more loanable funds for the issuer are known as a(n):
A)accretion bond.
B)participation certificate.
C)CMO.
D)stripped security.
E)commercial paper.

Question

Quizplus · Accepted Answer

Pools of mortgages put together are known as Collateralized Mortgage Obligations (CMO). These can be issued by government agencies or private investment banking corporations to raise more loanable funds for the issuer. Option A (accretion bond) is a type of bond that increases in value over time due to an increase in the issuer's credit rating. Option B (participation certificate) is a security that represents a fractional ownership interest in a pool of mortgage loans. Option D (stripped security) is a security where the cash flows from the underlying asset are separated into different classes of securities. Option E (commercial paper) is a type of short-term debt instrument.

Pools of Mortgages Put Together,either by a Government Agency or by a Private